Pradhan Mantri Mudra Yojana: Beyond the decadal journey

It is universally acknowledged that micro, small and medium enterprises (MSMEs) form the backbone of the Indian economy.

- C S SETTY

It is estimated that MSMEs contributed about 30.1 per cent to the country's gross value added (GVA) in 2022-23, while their contribution to India's total exports was 45.79 per cent in 2024-25.

Flow of credit to MSMEs had been a challenge for the formal financial system since independence. However, in recent times, this has significantly changed, with India stack/technology (duly imbibed at banks' end) and multiple government enablers, Pradhan Mantri Mudra Yojana (PMMY), has been able to bring a substantive change by giving a push to entrepreneurship and self employment.

Most beneficiaries of PMMY are first-generation entrepreneurs with humble beginnings that have been able to break free from the financial constraints faced by them.

Total disbursements under the PMMY reached ₹5.32 trillion in FY24. By end-February 2025, ₹4.8 trillion had been disbursed (sanctioned amount being ₹4.91 trillion, i.e., 98 per cent disbursement). Among the subcategories, Kishore had a major share (51 per cent) with respect to the amount disbursed, followed by Tarun (29.1 per cent).

Average loan size has reached ₹102,870 in FY25, with growth in ticket size seen in almost all the banks during the period.