Evaluation of PM MUDRA Yojana
Why in news?
Recently Pradhan Mantri MUDRA Yojana (PMMY) completed 8 years contributing immensely to the inclusion of several communities that have traditionally been underrepresented as an entrepreneur.
What is Pradhan Mantri MUDRA Yojana (PMMY)?
- PMMY provides collateral-free loans up to 10 lakh to the non-corporate, non-farm small/micro enterprises initially.
- PMMY was launched in 2015 with the objective to encourage young person to become 1st generation entrepreneurs.
- These loans are extended by Banks, NBFCs, Micro finance Institutions (MFIs) and other eligible financial intermediaries as notified by MUDRA Ltd.
- MUDRA has created three products namely ‘Shishu’, ‘Kishore’ and ‘Tarun’.
Achievements of PMMY
- New Entrepreneurs – The Mudra Scheme has created 8 crore new entrepreneurs.
- Bridging the gap – The scheme has potentially bridged the gap of India’s microfinance and banking sectors providing loans to micro entrepreneurs.
- Sub-culture of poverty – The PMMY has reduced the sub culture of poverty in short span of time.
- Banking in unbanked areas – PMMY provided loans to bottom half of India providing loans to the unbanked areas.
- Innovation – It induced innovation, creative ecosystem and also the risk-taking appetite of entrepreneurs which generated lot of employment opportunities.
- 1st time entrepreneurs – The share of Shishu loans is the highest (40%) suggesting that the PMMY has largely supported first-time entrepreneurs.
- Inclusion – PMMY has benefitted all segments of Indian society such as general, schedule caste/tribe (SC/ST) groups and other backward classes (OBCs).
- SC/ST and OBC categories account for a total of 51 per cent of all Mudra accounts.
- Women empowerment – The share of accounts held by women is 69%.
- In 2022 disbursements of loans to women entrepreneurs registered an average growth of 28%.
- Equal distribution – Since it is a national scheme, it has shown balanced penetration and economic growth across India.
- States such as Uttar Pradesh, Odisha and Bihar have recorded all-round gains from the PMMY.
What are the future aspirations?
- Timely utilization of benefits of 5G technology and e-commerce.
- More awareness about Mudra cards and further penetration in to remote areas.
- Scheme can be extended to personal sector other than farms and factories.
- They can start a loan funding of less than Rs 50,000 so that the gap of 0-50k can be fulfilled.