Finance Minister Nirmala Sitharaman on Tuesday reaffirmed the role of the Pradhan Mantri Mudra Yojana (PMMY) in supporting small entrepreneurs by providing collateral-free loans, enabling millions to start and expand businesses without the need for guarantees.
Replying to a question in the Rajya Sabha, the Finance Minister said the scheme continues to promote financial inclusion, particularly among micro and small enterprises in the non-corporate, non-farm sector.
Under PMMY, loans are extended across three categories — Shishu (up to Rs 50,000), Kishor (Rs 50,001 to Rs 5 lakh), and Tarun (Rs 5 lakh to Rs 10 lakh) — catering to businesses at different stages of growth, from early startups to expanding ventures.
Sharing details on asset quality, Sitharaman said that as of March 31, 2025, non-performing assets (NPAs) stood at 12.4 per cent in the Shishu category, 9.4 per cent in Kishor, and 7.92 per cent in Tarun. She added that banks are undertaking recovery measures to address stressed loans and ensure the sustainability of the scheme.
Addressing concerns over the relatively low uptake of the Tarun Plus category, the Finance Minister said the scheme is still at an early stage. Introduced following the Union Budget 2024–25 and implemented from October 2024, Tarun Plus offers collateral-free loans of up to Rs 20 lakh to borrowers who have successfully repaid their earlier Tarun loans.
She noted that more time is needed for the category to gain traction, as eligible entrepreneurs build repayment records and awareness about the scheme increases.
Since its launch in 2015, PMMY has sanctioned over Rs 32 lakh crore through more than 52 crore loans. Provisional figures for FY 2024–25 indicate additional sanctions of around Rs 5.5 lakh crore.
The Finance Minister highlighted that nearly 68 per cent of the beneficiaries under the scheme are women, reflecting its contribution to gender-inclusive growth and grassroots entrepreneurship.
The government, she added, remains focused on expanding access to credit for small businesses, with continued efforts aimed at promoting self-reliance and employment generation.
Her remarks come amid broader discussions on financial sector health, with overall MSME NPAs estimated at around 3.6 per cent as of March 2025, lower than the Mudra-specific figures.
-IANS
