Funding The Unfunded: Banks Sanction Rs 23.2 Lakh Crore To 40.8 Crore Beneficiaries Under PM Mudra Yojana

Banks and financial institutions have sanctioned loans amounting to Rs 23.2 lakh crore under the Pradhan Mantri MUDRA Yojana (PMMY) to fund the unfunded in the last eight years.

The PMMY was launched on 8 April 2015 by Prime Minister Narendra Modi with the aim to facilitate easy collateral-free micro credit of up to Rs 10 lakh to non-corporate, non-farm small and micro entrepreneurs for income generating activities.

The loans under PMMY are provided by member lending institutions (MLIs), including banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.

On the eighth anniversary of the PMMY on Saturday (8 April), Union Finance Minister Nirmala Sitharaman said, “Brought under the visionary leadership of Prime Minister Shri Narendra Modi, the scheme has enabled easy and hassle-free access to credit to micro-enterprises and has helped a large number of young entrepreneurs establish their businesses".

In reference to the PMMY data, Sitharaman said, “Since the launch of the scheme, as of 24 March 2023, about Rs 23.2 lakh crore has been sanctioned in 40.82 crore loan accounts".

About 68 per cent of accounts under the scheme belong to women entrepreneurs and 51 per cent of accounts belong to entrepreneurs of SC/ST and OBC categories, she said.

"This demonstrates that easy availability of credit to the budding entrepreneurs of the country has led to innovation and sustained increase in per capita income," the minister added.

Highlighting indigenous growth through MSMEs, the finance minister said, “The growth of MSMEs has contributed massively to the “Make in India” programme as strong domestic MSMEs lead to increased indigenous production both for domestic markets as well as for exports".

"The PMMY scheme has helped in the generation of large-scale employment opportunities at the grassroots level and also has proved to be a game changer while boosting the Indian economy," she added.

The Finance Ministry in a statement on Saturday (8 April) said the implementation of financial inclusion programme in the country is based on three pillars, namely, Banking the Unbanked; Securing the Unsecured; and Funding the Unfunded.

These aforesaid three objectives are being achieved through leveraging technology and adopting multi-stakeholders’ collaborative approach, while serving the unserved and underserved as well, it said.

"One of the three pillars of FI - Funding the Unfunded, is reflected in the Financial Inclusion ecosystem through PMMY, which is being implemented with the objective to provide access to credit for small entrepreneurs," it said.