AIR Spotlight: 8 years of PM MUDRA Scheme

AIR Spotlight is an insightful program featured daily on the All India Radio News on air. In this program, many eminent panellists discuss issues of importance which can be quite helpful in IAS exam preparation.

This article is about the discussion on:  8 years of Hassle Free Credit Access under PM MUDRA Scheme.

Participants

• Puneet Jain: Economic Analyst

• Rajesh Lekh: AIR Correspondent

Context – The PM MUDRA Yojana (PMMY) completes 8 years. The scheme was launched with the objective to provide collateral-free access to credit in a seamless manner to the micro-enterprises in the country.

PM MUDRA Yojana (PMMY)

Pradhan Mantri MUDRA Yojana was launched on 8th April 2015 to facilitate easy collateral-free micro-credit of upto Rs 10 lakh to non-corporate, non-farm, small and micro-entrepreneurs for income-generating purposes. PMMY stands for social justice in action and embodies the true spirit of Sabka Saath Sabka Vikas. 

• MUDRA stands for Micro Units Development & Refinance Agency Ltd., which is a financial institution set up by the Government.
• Banks and financial institutions have sanctioned Rs. 23.2 lakh crore to over 40.82 crore beneficiaries under the Mudra Yojana launched to fund the unfunded eight years ago.
• About 68% of the 40.82 crore accounts to which these loans were disbursed belong to women and 51% of the accounts belong to entrepreneurs of Scheduled Tribes and Scheduled Castes and other backward categories.
• The loans under PMMY are provided by Member Lending Institutions (MLI) i.e., Banks, Non-Banking Financial Companies (NBFC), Micro-Finance Institutions (MFIs) and other Financial Intermediaries. The borrower can approach any of the mentioned financial institutions or can apply online through the Udyami Mitra portal.

Know more about PM Mudra Yojana in the linked article. 

PM MUDRA Yojana Categories 

PM MUDRA Yojana has three categories as per the stage of growth and funding needs of the beneficiary micro-unit.

• Shishu – covering loans upto Rs 50,000.
• Kishore – covering loans above Rs 50,000  up to Rs 5.0 lakh.
• Tarun – covering loans above Rs 5.0 lakh up to Rs 10.0 Lakh.

Of the total, Shishu accounts for 83% of the total loans while Kishore 15% and the remaining 2% for Tarun.

Importance of PMMY 

The PMMY is a comprehensive plan to take the benefits of economic development to the last person in the country, empowering women and marginalised entrepreneurs. 

• Financial inclusion – which primarily stands on three pillars, banking the unbanked, securing the unsecured and funding the unfunded.
• The scheme has played a vital role in funding the unfunded and ensuring life of dignity as well as prosperity for countless Indians.
• This scheme has been targeted for the benefit of people living in very small villages/towns having no access to a formal financial framework.
• Pradhan Mantri MUDRA Yojana enables youth to undertake their entrepreneurship journey as it has been designed to provide collateral-free loans.
• The PMMY has helped in the generation of large-scale employment opportunities at the grass root level and also has proved to be a game changer while boosting the Indian economy. 
• Loans under PMMY are provided to meet both term loan and working capital components of financing for income-generating activities in manufacturing, trading and service sectors, including activities allied to agriculture such as poultry, dairy, beekeeping, etc.
• PM MUDRA Yojana is entirely a digital ecosystem where a person can apply online and money is disbursed online. 

Conclusion – The Pradhan Mantri MUDRA Yojana has given wings to the dreams and aspirations of millions of Indians along with the feeling of self-worth and independence.

AIR Spotlight: 8 years of PM MUDRA Scheme:- Download PDF Here

Read previous AIR Spotlight articles in the link.