Mudra Yojana and Financial Inclusion: A Quiet Revolution in Credit Access
Since its launch in 2015, the Pradhan Mantri Mudra Yojana (PMMY) has emerged as a cornerstone of India’s financial inclusion strategy. Targeted at small and micro enterprises in the non-corporate, non-farm sector, Mudra loans have enabled over 34 crore borrowers to access more than Rs 18.6 lakh crore in credit. The scheme has played a particularly significant role in reaching economically weaker states, as highlighted by a recent State Bank of India (SBI) report.
One of Mudra’s greatest successes lies in its democratization of credit. With 68% of loans going to women and 51% to borrowers from SC/ST/OBC communities, the scheme has empowered traditionally excluded groups. Moreover, the categorization of loans into Shishu, Kishor, and Tarun allows businesses at different stages to access capital suited to their needs—ranging from ₹50,000 to ₹10 lakh.
However, to maximize its impact, certain improvements are necessary:
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Enhanced post-disbursement support, including business training and mentorship.
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Better credit risk assessment tools to reduce default rates while still serving high-risk populations.
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Digitization of application and monitoring processes to improve transparency and reduce paperwork.
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Stronger integration with financial literacy programs, especially in rural areas.