10 years of Mudra Yojana: All about PM Modi’s flagship loan scheme for grassroots entrepreneurship

PM Modi interacted with beneficiaries of the scheme at his official residence in Delhi on Monday.

Prime Minister Narendra Modi on Monday marked a significant milestone on the completion of 10 years since the launch of the Pradhan Mantri Mudra Yojana (PMMY). On the occasion, the PM interacted with beneficiaries of the scheme at his official residence in Delhi. PM Modi along with the beneficiaries celebrated India’s growing entrepreneurial spirit.

What is Mudra Yojana?

Launched on April 8, 2015, the Mudra scheme has evolved into one of the government's most impactful financial inclusion initiatives. It provides small-ticket loans under three categories namely, Shishu (up to Rs 50,000), Kishor (Rs 50,000 to Rs 5 lakh) and Tarun (Rs 5 lakh to Rs 10 lakh), to non-corporate, non-farm small and micro enterprises. According to the official data shared by the Centre, more than 52 crore loans worth Rs 32.61 lakh crore have been sanctioned over the last decade.

During the interaction, PM Modi listened to inspiring stories from entrepreneurs across India who spoke of how the scheme helped them start or expand their businesses. Many highlighted how these loans, free from the burden of collateral, offered them their first real chance at self-employment, financial independence and even job creation in their communities.

Gendered economic transformation

A striking aspect of PMMY’s success lies in its impact on women entrepreneurs, who account for nearly 70 percent of the total loan accounts, the official data stated. This focus has translated into substantial economic gains. Finance Ministry data reveals that between FY16 and FY25, the average loan amount per woman borrower grew at a CAGR of 13 per cent to Rs 62,679. Meanwhile, their average incremental deposits rose 14 per cent CAGR, reaching Rs 95,269.

The International Monetary Fund (IMF), in its 2024 report, acknowledged this progress, noting that “an enabling policy environment for entrepreneurship through various programmes, such as the Pradhan Mantri Mudra Yojana, is contributing to increased self-employment and formalisation through credit.” It also highlighted that India now has over 2.8 million women-owned MSMEs, thanks in part to PMMY.

Boosting jobs and scaling enterprises

Mudra’s contribution goes beyond individual business stories. In regions like Jammu and Kashmir, more than 20.7 lakh loans have been sanctioned.

The growth isn’t just in micro-enterprises either. Loans under the Kishor category — used to scale up operations — have seen a sharp rise, from 5.9% in FY16 to 44.7% in FY25. The Tarun category is also gaining traction, indicating that PMMY isn’t just seeding new businesses, it’s also nurturing their expansion.

MSMEs: From margins to mainstream

Micro, Small and Medium Enterprises (MSMEs) are the backbone of the Indian economy and PMMY has provided them with unprecedented access to credit. MSME lending jumped from Rs 8.51 lakh crore in FY14 to Rs 27.25 lakh crore in FY24, with expectations to cross Rs 30 lakh crore this year. The share of MSME credit in total bank lending also increased from 15.8% to nearly 20% over the decade.