Pradhan Mantri Mudra Yojana: A Critical Analysis of its Role in Supporting Small and Micro Enterprises in India
Author : Poonam S Raibagi and Yashwanth R
Abstract :
Purpose: The purpose of this study is to determine whether the Pradhan Mantri Mudra Yojana (PMMY) has been successful in increasing the amount of loans available to small and micro businesses (SMEs). It examines how the program has affected business startup and financial inclusion developments. Through official institutions, PMMY offers loans without collateral to help underprivileged business owners. The study explores how the program supports businesses' growth and sustainability. It also draws attention to the policy's observable effects at the local level. The objective is to evaluate how well PMMY accomplishes its main objectives.
Design/Methodology/Approach: Both quantitative and qualitative methodologies have been used in the study strategy. One hundred verified Karnataka PMMY plan beneficiaries provided the data. The types of loans, sectors involved, and their planned purposes were examined using descriptive statistical methods. Furthermore, secondary data from academic and governmental sources gave policies a contextual understanding. Trends in the allocation of investments among different organisations and business categories were examined. This approach provides a thorough viewpoint on the initiative's implementation and outcomes.
Findings: Shishu accounted for a sizable majority of loans (61%), underscoring PMMY's focus on the early phases of funding. There is still very little progress made into the Kishore and Tarun categories. Manufacturing and agriculture lag behind the retail and services sectors in terms of loan distribution. In order to provide these loans, financial institutions—both public and private—are essential. The biggest benefits have gone to startups, although there are big differences in how they grow after getting funding. Furthermore, persistent structural barriers still prevent financed enterprises from growing and becoming sustainable.
Keywords :
Financial Inclusion, Micro and Small Enterprises (MSEs), Entrepreneurship Development.
