PMMY (Pradhan Mantri Mudra Yojana) was launched by Prime Minister Shri Narendra Modi on April 8, 2015, with a loan of up to Rs. 10 Lakh for non-corporate businesses, non-small / small farms. As we celebrate 7 years of providing funding for the pillars of the Pradhan Mantri MUDRA Yojana (PMMY), let’s take a look at some of the major components of this Scheme and its achievements.
Minister of Finance and Business Affairs Smt. Nirmala Sitharaman said, “It is noteworthy that more than 34.42 crore borrowed accounts amounting to Rs.18.60 lakh crore have been opened under the Scheme to create revenue streams”.
Regarding the theme of the business environment and large-scale job opportunities through PMMY, the Minister of Finance said “The strategy has helped create a conducive environment for small businesses and has helped create large jobs at the grassroots level. More than 68% of the loans are approved by women and 22% of the loans are given to new entrepreneurs who have not taken out loans since the inception of the program.
While greeting and congratulating all the beneficiaries of Mudra and urging others who want to borrow to come forward and participate in the nation building program, Smt. Sitharaman said, “With 51 per cent of the loans approved so far to the SC / ST / OBC section, Pradhan Mantri Mudra Yojana represents social justice and embodies the true spirit of ‘SabkaSaath, SabkaVikas’, as thought” The Minister of Finance of the Union (MoS), Dr. Bhagwat KisanraoKarad, said “The facilitator of the launch of the PMMY was to provide credit to the institution for small, medium and micro enterprises”
Entrepreneurs access the scheme
“By providing assistance to 34.42 million account holders, the program has successfully reached out to emerging entrepreneurs seven years ago since its inception” added by MoS. On the issue of debt flow, the MoS said, “It is also remarkable. The PMMY-focused program has been able to extend the credit to the growing number of beneficiaries from the ‘aspiring regions’ identified by NitiAayog thus allowing debt to flow into these debt-hungry regions.
The implementation of the Financial Inclusion (FI) program in the country is based on three pillars, namely, Banking Advertising, Protecting the Unprotected and Unfunded Funding. Under this ongoing program, these three objectives are achieved through the use of effective technology and adoption of a multi-stakeholder approach, while assisting the unemployed and the unsuitable. One of the three pillars of FI Unfunded Funding is reflected in the FI environmental program through PMMY, which is used to provide small business access to credit. PMMY focuses on the financial needs of all stakeholders, from emerging entrepreneurs to hardworking farmers, through the various programs of this program.
Key features of PMMY
An important program to provide financial assistance to the previously marginalized and economically neglected classes, Pradhan Mantri MUDRA Yojana (PMMY) has given wings to the dreams and aspirations of millions, as well as a sense of confidence and independence. key features of this PMMY and its success over the past 7 years Is the loan given Rs. 10 Lakh by Member Loan Banks, Non-Bank Financial Institutions (NBFCs), Microfinance Institutions (MFIs), other financial coordinators, in three categories namely ‘Shishu’, ‘Kishore’ and ‘Tarun’ indicating growth phase or development and the financial needs of borrowers. Shishu covers loans amounting to Rs. 50,000, Kishore repaying loans of more than Rs. 50,000 to Rs. 5 lakh and Tarun covering loans over Rs. 5 lakh and up to Rs. 10 lakh. With a view to developing businesses for the emerging youth, it is ensured that a strong focus is on the Shishu loan, followed by the Kishore and Tarun sections.
Loans under PMMY are provided to meet both long-term and part-time loans to finance income-generating activities in the manufacturing, commercial and employment sectors, including agricultural related activities such as poultry, dairy, beekeeping, etc. The interest rate is determined by the lending institutions in accordance with the RBI guidelines. In the case of working capital, interest is charged only on the amount held by the borrower overnight.
Achievements of the Scheme (Effective from 25.03.2022)
Loans over 34.42 crore amounting to Rs 18.60 lakh crore have been approved since the launch of this program (as of 25.03.2022). About 22% of the total loan amount is approved by New Entrepreneurs. 4.86 million PMMY loan accounts with an allowable amount of Rs. 3.07 lakh crore extended to the current FY (As of 25.03.2022) A loan of approximately 68% of the total loan amount is provided to women entrepreneurs.
The average loan size is approximately Rs 54,000, 86% of loans in the ‘SHISHU’ category. About 22% of loans are given to New Entrepreneurs, About 23% of loans are given to SCs and STs borrowers. About 28% of loans granted to OBCs’ borrowers (51% of loans granted to SC / ST / OBC loan categories) and approximately 11% of loans granted to Community Lending Loans Announced by the Minister of Finance of the Union on 14.05.2020 under the Atma Nirbhar Bharat Package (ANBP), the program has been developed as a response to an unprecedented situation and aims to alleviate financial stress on borrowers ‘down the pyramid’ by reducing their debt costs.
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