PM Mudra Yojana 10 years: Prime Minister Narendra Modi on Tuesday marked 10 years of the Pradhan Mantri Mudra Yojana (PMMY), highlighting that over Rs 33 lakh crore worth of collateral-free loans have been sanctioned under the scheme. Designed to empower individuals and boost self-employment, PMMY aims to support aspiring entrepreneurs across India by providing easy access to credit.

The initiative has played a key role in promoting small businesses and enabling citizens to pursue their entrepreneurial ambitions without the burden of securing collateral.

In a post on X, PM Modi wrote, “Mudra Yojana has given opportunities to countless people to showcase their entrepreneurial skills. Interacted with some of the beneficiaries of the scheme. Their journey is inspiring.”

During his interaction, the Prime Minister emphasised the government’s commitment to assessing and improving its schemes. “This government is such that it evaluates the results of a scheme after ten years. We are asking beneficiaries about their experience and will bring improvements where needed,” he said.

Union Minister Piyush Goyal highlighted that Mudra Yojana has brought a fundamental shift in mindset by making entrepreneurship accessible to the marginalised. Over 52 crore loans have been disbursed under the scheme so far, with an impressively low NPA rate.

What is Pradhan Mantri MUDRA Yojana?

The Pradhan Mantri MUDRA Yojana (PMMY) offers collateral-free loans of up to Rs 10 lakh to non-corporate, non-farm small and micro enterprises. The scheme supports a wide range of income-generating activities in sectors such as manufacturing, trading, and services, along with allied agricultural ventures like dairy, poultry, and beekeeping.

Who benefits from PM Mudra Yojana?

PMMY caters primarily to non-corporate, small-scale enterprises that are often run as proprietorships or partnerships. These include a wide array of local entrepreneurs such as:

Small manufacturers

Shopkeepers and vendors

Auto and truck operators

Food stall owners and service providers

Artisans and repair technicians

Home-based industries and processors

This grassroots reach has made Mudra a crucial tool for inclusive economic growth.

How to access Mudra loans

Loans under the PMMY are offered through a wide network of Member Lending Institutions (MLIs), including:

Public and Private Sector Banks

Regional Rural Banks (RRBs)

State Cooperative Banks

Micro Finance Institutions (MFIs)

Non-Banking Financial Companies (NBFCs)

Small Finance Banks (SFBs)

Other financial entities approved by Mudra Ltd.

Interest rates on Mudra loans are determined by the respective lending institutions based on RBI guidelines. Rates may vary depending on the borrower’s profile and the nature of the enterprise.

Charges and processing fees of Mudra Yojana

While banks may levy upfront fees based on their internal policies, processing fees for ‘Shishu’ loans (up to Rs 50,000) are typically waived by most banks, easing access for first-time and small-scale borrowers.

According to data from the Ministry of Finance and PIB, 68% of Mudra loans were availed by women entrepreneurs. Additionally, 50% of the accounts belong to SC, ST, and OBC communities, and 11% are held by minorities—underscoring the scheme’s inclusive impact.

Loan categories and rising credit demand

Mudra loans are categorised as:

Shishu (up to Rs 50,000)
Kishor (Rs 50,000– Rs 5 lakh)
Tarun (Rs 5– Rs 10 lakh)

There has been a notable shift towards higher-value loans. In FY25, Kishor loans accounted for 44.7 per cent of disbursements, up from 5.9 per cent in FY16. The average loan size tripled from Rs 38,000 to ₹1.02 lakh during this period.

Boost to women’s economic empowerment

Between FY16 and FY25, the average loan to women grew at a CAGR of 13% to Rs 62,679, while their average deposit balances grew at 14% annually to ₹95,269. States disbursing more to women saw higher employment in women-led MSMEs.

Credit to MSMEs surged from Rs 8.51 lakh crore in FY14 to Rs 27.25 lakh crore in FY24 and is projected to cross Rs 30 lakh crore in FY25. The share of MSME lending in overall bank credit rose from 15.8% to nearly 20%.