On the 8th of April, 2025 India marks the 10 years of Pradhan Mantri Mudra Yojana (PMMY), a silent but powerful flagship scheme of the Modi government that proved to be game changer in the lives of crores of individuals. It was launched a decade ago and designed to push small entrepreneurs, especially those who are out of the reach of formal banking into the mainstream of finance. A decade down the line, it is clear that this scheme has accomplished more than simply handing out loans; it has triggered an entrepreneurial revolution from the bottom.
Since the scheme’s launch, over ₹33 lakh crore has been disbursed under more than 52 crore outstanding loan accounts under Pradhan Mantri Mudra Yojana. One of the key differentiating factors for this scheme is that it doesn’t take any collateral. That simple yet strong idea provided an opportunity to millions of people who had ideas but lacked access to traditional finance. From street vendors and tailors to mobile repair shop owners and rural artisans, PMMY has provided an opportunity to common Indians to convert ideas into livelihood means.
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. #10YearsOfMUDRA https://t.co/QcoIK1VTki
— Narendra Modi (@narendramodi) April 8, 2025
Sharing my interview with Economic Times, where I elaborate on the life changing ability of Mudra Yojana and why it remains an important scheme in our quest for dignity and empowerment. #10YearsOfMUDRA.https://t.co/W4ercecYsj
— Narendra Modi (@narendramodi) April 8, 2025
What’s most surprising is how broad the scheme has been. 68% of Mudra loan accounts are held by women, a huge shift towards economic empowerment. For some, these loans were less about business than about taking back control.
Pradhan Mantri MUDRA Yojana (PMMY) has provided a guarantee to underprivileged individuals who have historically faced barriers to accessing bank loans due to a lack of collateral. This flagship initiative, spearheaded by PM Modi and acknowledged by the IMF, has significantly… pic.twitter.com/bIX6UfvAu5
— DD News (@DDNewslive) April 8, 2025
Consider Kamlesh, a home-based tailor in Delhi, who used a Mudra loan to add more work and now has three other women working for her. Or Bindu, who increased business from producing 50 brooms a day to a unit producing 500. These are not isolated success stories, they are part of a larger trend of change.
The ambit of the scheme has also penetrated deeply into hitherto excluded communities. According to a SBI report, approximately half of all Mudra loan accounts belong to SC, ST, and OBC entrepreneurs and 11% belong to members of the minority community. In breaking traditional credit exclusion, PMMY has allowed many to aspire higher and become part of the formal economy.
Another major impact of the scheme is its role in strengthening the MSME sector, which forms the backbone of India’s economy. Lending to MSMEs grew sharply from ₹8.51 lakh crore in FY14 to ₹27.25 lakh crore in FY24 and is expected to cross ₹30 lakh crore this year. And it’s not just about more loans, it’s about better, bigger loans. The average Mudra loan size has nearly tripled over the decade, from ₹38,000 in FY16 to over ₹1.02 lakh in FY25. This upward trend shows that businesses are not just starting, they’re scaling up.
In fact, there’s been a noticeable shift in the kind of loans people are taking. Initially, most loans fell under the “Shishu” category (up to ₹50,000), which suited micro-enterprises. But over time, more entrepreneurs are applying for “Kishor” (₹50,000 to ₹5 lakh) and “Tarun” (₹5 lakh to ₹10 lakh) loans. In FY25, Kishor loans alone made up nearly 45% of the total. This progression tells a deeper story: businesses are maturing, confidence is growing, and people are willing to take calculated risks.
Pradhan Mantri Mudra Yojana (PMMY) completes 10 glorious Years of empowering Small and Micro Entrepreneurs
➡️ Launched with Prime Minister’s vision of “Funding the Unfunded”, PMMY extends collateral-free loans to small enterprises that face significant challenges in accessing… pic.twitter.com/oIGfgq58ei
— PIB India (@PIB_India) April 8, 2025
Geographical coverage of the scheme has been no less impressive. Tamil Nadu has seen highest disbursement among states, followed by Uttar Pradesh and Karnataka. Even in Union Territories, the likes of Jammu and Kashmir have seen good take-off, with disbursements of more than ₹45,000 crore. Such broad geographical coverage is a pointer that PMMY is not a metro-centric scheme, it’s as much about the small-town mechanic as it is about the urban startup.
Despite its huge size, the non-performing asset (NPA) ratio under Pradhan Mantri Mudra Yojana is a paltry 3.6%. That’s remarkably low and points to both conservative lending and repayment discipline by borrowers. It also says a lot for the scheme’s success in identifying and supporting genuine entrepreneurs.
The program has not been off the world’s radar either. The International Monetary Fund (IMF) has repeatedly complimented Mudra for its efforts in financial inclusion and self-employment. The IMF, especially, has highlighted the way PMMY complements schemes like Jan Dhan Yojana by not only linking people to banks but also providing them with the wherewithal to thrive economically.
In hindsight, it’s clear that Pradhan Mantri Mudra Yojana did more than simply plug a credit gap. It transformed minds. Before 2014, small business owners were stuck in cycles of informal lending or unable to access credit at all. Banks, on the other hand, were disposed to favor large corporate loans, many of which ultimately defaulted. PMMY flipped that equation on its head. It wagered on the underdog, on the street vendor, on the single mother who ran a tailoring business out of her home. And that wager has paid off, not just in dollars and cents, but in human potential unleashed.
With the Pradhan Mantri Mudra Yojana entering its second decade, its effects already start to become evident on small-town streets, market lanes, and rural India. People who earlier waited for jobs are now generating employments for others. That is the real success of PMMY not just funding enterprises, but changing lives.
