Mudra loan has become the
engine of financial inclusion, employment generation and growth
On April 8, 2025, the Pradhan Mantri Mudra Yojana completed 10 years. In these 10 years, this scheme has successfully brought about radical changes in the social and economic sectors. It has also played an essential role in realising the dream of financial inclusion, creating employment, making people self-reliant, empowering women and ensuring inclusive development in the country.
Under this, more than 52 crore
loan accounts have been opened so far, out of which 78% or 40 crore accounts
are in the Shishu category, 20% or 10 crore accounts are in the Kishor
category, while 2% or two crore accounts are in the Tarun and Tarun Plus
category. According to the data of the Ministry of Statistics and Program
Implementation, in the year 2021, the country had a population of about 136
crores, out of which the number of youth between 15 and 29 years was about 37
crores and till now more than 52 crore people have been connected to the bank
with the help of Mudra loan, which shows that all the youth of the country
between 15 and 29 years are self-employed today.
Interestingly, the share of
the Shishu category declined from 93% in 2016 to 51.7% by the end of FY 2025,
while the share of the Kishor category increased from 5.9% in 2016 to 44.7% by
the end of FY 2025. These figures show that the Shishu category promoter
business has grown significantly.
The loans given under Pradhan
Mantri Mudra Yojana can be classified into four categories. Under the Shishu
category, loans up to Rs 50,000 are given, while under the Kishor category,
loans from Rs 50,000 to Rs 5 lakh are given, under the Tarun category, loans
from Rs 5 lakh to Rs 10 lakh are given and under the Tarun Plus category, loans
from Rs 10 lakh to Rs 20 lakh are given. Under Tarun Plus, loans are given only
to those borrowers who have taken a loan earlier and repaid it successfully.
It is worth noting that the
loan amount given under Pradhan Mantri Mudra Yojana is guaranteed by the Credit
Guarantee Fund for Micro Units. If the borrower cannot repay the loan for any
reason, then, upon fulfilling certain conditions, this institution will pay the
outstanding loan so that the bank's financial burden does not increase.
In the last 10 years, the
scope of Pradhan Mantri Mudra Yojana has increased significantly. Initially,
Mudra loans were only given to the manufacturing, trading, and service sectors.
Later, agriculture and allied sectors were also included under it. This loan
was also given in 2018 to purchase tractors and power tillers. At the same
time, from the financial year 2019, this loan was also provided for individuals'
commercial use of motorcycles.
To ensure that no one faces
any problem in taking Mudra loan, hand-holding has been arranged in bank
branches, online application facility has been made available, loan application
form has been simplified, nodal officers have been posted in nationalised banks
for monitoring Mudra loans, the government is reviewing the distribution of
loans under Mudra Yojana by nationalised banks from time to time, the 2%
interest subvention given to eligible Shishu category borrowers during payment
of instalments has been extended to all categories of loans, etc. Due to these
provisions, the number of people taking Mudra loans continuously increases.
The average loan ticket size
in 2025 is Rs 1.02 lakh, which was Rs 72,000 in FY 2023 and Rs 38,000 in 2016.
In the first three years of its launch, the growth rate of loans given under
this scheme was 33%, which declined during the Corona period, but again, in FY
2023, it saw a growth of 36%. In this way, this scheme is continuously working
towards making the commoner self-reliant.
Pradhan Mantri Mudra Yojana is
also necessary in promoting inclusive development because half of the 52-crore
people are from Scheduled Castes, Scheduled Tribes, and backward classes. Also,
68% of the beneficiaries are women, and 11% of the beneficiaries come from the minority
class. These figures say that with the help of this scheme, economic equality
is coming into society. At the same time, it ensures all sections'
participation in the country's development.
If we talk about state-wise
women entrepreneurs in the context of this scheme, the highest number of women,
4.2 crore, is from Bihar, while the number of women in Tamil Nadu is four crore
and in West Bengal, 3.7 crore. The highest number of women account holders,
i.e. 79%, are from Maharashtra, while Jharkhand is in second place with 75%,
and West Bengal is in third place with 73%. Interestingly, in the last 9 years,
the amount of loan given per woman borrower has increased from Rs. 62,679 to
Rs. 95,269, which shows that women are moving fast towards becoming empowered
and self-reliant.
The Udyam portal was launched
on 1 July 2020. Analysis of the registered entrepreneurs shows that women
constitute 20.5% of the total registered micro, small, and medium enterprises
(MSMEs), while women's share in employment generation is 18.73%. Tamil Nadu has
the highest employment generation of 15.7%, led by women entrepreneurs, while
Maharashtra has generated 12.1%, and Karnataka and Uttar Pradesh have generated
8% employment.
Pradhan Mantri Mudra Yojana is
also working to bring equality among the states. With the help of this scheme,
more people have opened loan accounts in banks in the recently backward states,
and more loans have been distributed there, which has caused the people there
to become self-reliant and economic activities to increase. For example, loan
distribution in Bihar has increased from 5.67% to 10.97%, while in Uttar
Pradesh, loan distribution has risen from 9.27% ??to
11.30% and in Odisha, it has increased from 4.24% to 4.51%.
Under Mudra Loan, a total loan
of Rs 70,051 crore was sanctioned in the developed state of Gujarat in the last
5 years, i.e. from the financial year 2020-21 to November 2024, and there has
been an increase of 74% in loan disbursement in the last 4 years. Under this
scheme, 1.95 crore Mudra loan accounts have been opened in Gujarat till
November 2024, while 80.5 lakh accounts were opened under this scheme till
November of the financial year 2024-25.
With the help of this scheme,
Scheduled Commercial Banks (SCBs) will increase credit to the MSME sector by Rs
27.25 lakh crore during FY 2024 from just Rs 8.5 lakh crore in FY 2014, and it is
estimated to grow to Rs 30 lakh crore in FY 2025.
In such a situation, it would
be appropriate to say that in the last 10 years, Pradhan Mantri Mudra Yojana
has played an essential role in realising the dream of financial inclusion,
empowering women, realising the dream of inclusive development, bringing
equality among states, making the youth self-reliant, bringing the deprived
section into the mainstream, promoting digitalisation, etc.
(Satish
Singh is an Ahmedabad-based Senior Columnist. Views are personal. Phone-8294586892)
