The Pradhan Mantri Mudra Yojana (PMMY), launched by the Indian government in April 2015, aims to bridge the capital gap for aspiring business owners by offering accessible, collateral-free micro-credit to non-corporate, non-farm small and micro-enterprises. This initiative, designed to ‘fund the unfunded,’ promotes financial inclusion, self-employment, and a vibrant startup ecosystem in India.
Aditya Ghanshyam Bhai Rathore, a young entrepreneur from Bhavnagar, exemplifies the scheme’s impact with his 3D printing startup, Aditya Techlabs, which received a ₹2 lakh loan from the Mudra Yojana. His story highlights the scheme’s role in transforming innovative ideas into businesses and generating job opportunities.
PM Mudra Yojana: Fueling the Unfunded
The primary objective of the PM Mudra Yojana is to empower individuals to become self-reliant job creators. It provides financial assistance for income-generating activities across manufacturing, services, retail, and allied agricultural sectors through three loan categories:
- Shishu: Loans up to ₹50,000 for new businesses or those needing minimal capital.
- Kishor: Loans from ₹50,001 to ₹5 lakh for established businesses seeking expansion.
- Tarun: Loans from ₹5 lakh up to ₹10 lakh for well-established businesses with higher funding needs.
The Union Budget 2024-25 introduced a “Tarun Plus” category, offering loans up to ₹20 lakh for businesses that have successfully repaid Tarun loans. PM Mudra Yojana loans are collateral-free, feature easy and hassle-free disbursement, flexible repayment options, and no processing charges.
Aditya Rathore’s Journey: A PM Mudra Yojana Success Story
Aditya Ghanshyam Bhai Rathore conceived his 3D printing startup, Aditya Techlabs, during his academic studies but faced funding challenges. Discovering the Mudra scheme’s collateral-free assistance for young entrepreneurs, he applied and received a ₹2 lakh loan within two weeks. This enabled him to acquire essential equipment and launch his company, which offers 3D printing, rapid prototyping, and reverse engineering services. Rathore met Prime Minister Narendra Modi to discuss his entrepreneurial journey and the scheme’s benefits, and later attended an event commemorating 10 years of the Pradhan Mantri Mudra Yojana, where he again credited the scheme with empowering self-reliance.
The Wider Impact of the Pradhan Mantri Mudra Yojana
The PM Mudra Yojana has significantly impacted India’s entrepreneurial landscape, promoting self-employment and job creation, particularly in rural and semi-urban areas.
As of March 24, 2023:
- Approximately ₹23.2 lakh crore has been sanctioned across 40.82 crore loan accounts.
- Women Entrepreneurs: 68% of total loan accounts belong to women.
- Underprivileged Communities: 51% of accounts are held by entrepreneurs from Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Classes (OBC).
- Job Creation: Between 2015-16 and 2017-18, over 3.49 crore new entrepreneurs benefited. Over 50% of jobs were generated by existing businesses using Mudra loans, and 37% of new Mudra loan entrepreneurs created additional employment.
- Financial Discipline: The Non-Performing Asset (NPA) rate dropped from 3.61% in FY21 to 2.1% in FY24. Total Mudra loan exposure grew from ₹3.3 lakh crore in FY22 to over ₹5 lakh crore in FY24.
The Mudra Card, a RuPay debit card with an overdraft facility, aids working capital management. The application process is streamlined through various lending institutions and online portals like JanSamarth and Udyamimitra.
The PM Mudra Yojana has proven to be a transformative initiative for India’s micro and small enterprises, dismantling financial barriers and fostering entrepreneurship, thereby driving economic growth and self-reliance.
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