Empowering India's entrepreneurs: The transformative role of Mudra loans

India's economic progress is deeply interwoven with the success of its micro-, small-, and medium-enterprises (MSMEs).

- ASHOK CHANDRA

The sector not only serves as the backbone of our economy but also plays a pivotal role in employment generation and fostering grassroots innovation.

Recognising this potential, the Government of India had launched the Pradhan Mantri Mudra Yojana (PMMY), popularly known as Mudra loan, on April 8, 2015, a game-changing initiative aimed at providing credit to micro and small enterprises (MSEs) that form the core of India's entrepreneurial landscape.

Today, the Mudra loan has become a vital financial lifeline for the unorganised and underserved segments, driving livelihood generation and economic growth. As it completes a decade, its impact is evident in the transformation of semi-urban, rural, and hinterland economies across India. Since its inception, the PMMY scheme has facilitated ₹32 trillion in loans in 51 crore accounts, significantly benefitting marginalised communities. Notably, around 50 per cent of these loans have been availed by SC/ST/OBC borrowers, while 68 per cent have empowered women entrepreneurs, reinforcing its role in financial inclusion.

Empowering livelihoods The Mudra loan scheme was conceptualised to provide collateral-free funding in three categories — Shishu (loans up to ₹50,000), Kishore (loans above ₹50,000 to ₹5 lakh), and Tarun (loans above ₹5 lakh to ₹10 lakh).