The Pradhan Mantri MUDRA Yojana (PMMY) was launched on April 8, 2015, by Prime Minister Narendra Modi to improve access to credit for small and micro businesses. It provides collateral-free loans to entrepreneurs in non-farm sectors, helping them start or expand their ventures and promoting financial inclusion.
1. What is the Pradhan Mantri MUDRA Yojana (PMMY)?
PMMY is a government initiative aimed at providing easy access to credit for small and micro enterprises. It offers loans without collateral to non-corporate, non-farm businesses across manufacturing, trading, services, and allied agriculture sectors like dairy, poultry, and beekeeping. The scheme helps people who were previously excluded from formal banking.
2. How are PMMY loans structured and categorized?
Loans are offered in four categories depending on business stage and funding needs. Shishu covers loans up to ₹50,000, Kishor ranges from ₹50,000 to ₹5 lakh, Tarun is from ₹5 lakh to ₹10 lakh, and Tarun Plus covers loans up to ₹20 lakh. This structure ensures support for startups, growing businesses, and more established small enterprises.
3. What has been achieved under PMMY so far?
As of March 2026, PMMY has sanctioned over 57.79 crore loans totaling ₹40.07 lakh crore. About two-thirds of the loans have gone to women entrepreneurs, and roughly one-fifth were extended to first-time business owners. The scheme has also reached marginalized sections, with OBCs accounting for over 50% of beneficiaries.
4. Which institutions provide these loans?
PMMY loans are disbursed through banks, non-banking financial companies (NBFCs), and microfinance institutions (MFIs). These partnerships ensure that small borrowers can access credit conveniently across urban and rural areas.
5. What is the overall impact of the scheme?
PMMY has increased financial inclusion by offering collateral-free loans to previously underserved groups. It has supported self-employment, helped small businesses grow, and reduced reliance on informal lenders. Over the years, the scheme has contributed to economic activity at the grassroots level, reaching millions of entrepreneurs across India.
