A Decade of Empowerment: PM Mudra Yojana Fuels India’s Grassroots Growth Story

India is set to celebrate a major milestone on 8th April 2025 as the Pradhan Mantri Mudra Yojana (PMMY) completes 10 impactful years of transforming lives and empowering grassroots entrepreneurship. Launched in 2015, this flagship scheme by Prime Minister Shri Narendra Modi aimed to provide collateral-free institutional credit to the unfunded and underbanked segments of society—micro and small entrepreneurs.

What started as a vision to “Fund the Unfunded” has today turned into a financial revolution that has not only empowered individuals but also played a critical role in shaping India’s self-reliant economy.

Transforming Lives, One Loan at a Time

From tea stalls and tailoring units to salons and mobile repair shops, over 52 crore loans worth ₹32.61 lakh crore have been sanctioned under PMMY. Behind each number lies a success story. Whether it’s Kamlesh, a home-based tailor in Delhi who expanded her business and employed other women, or Bindu, who scaled her broom-making enterprise tenfold, the scheme has empowered people across rural and urban India to become job creators instead of job seekers.

Women Lead the Way

One of the scheme’s most remarkable achievements is its impact on women entrepreneurship. Women account for 68% of all PMMY beneficiaries, with states showing higher disbursal to women also reporting greater employment generation through women-led MSMEs. Between FY16 and FY25, per-woman loan disbursement has grown at 13% CAGR, while per-woman incremental deposits grew at 14% CAGR, reflecting increasing financial confidence among women.

Reaching the Margins

PMMY has also succeeded in fostering inclusive growth, with 50% of Mudra accounts held by SC, ST, and OBC entrepreneurs and 11% by minority communities. The scheme has broken traditional credit barriers, ensuring wider access to formal finance.

MSMEs: The Backbone of Bharat

The SBI report shows a dramatic surge in MSME lending—from ₹8.51 lakh crore in FY14 to ₹27.25 lakh crore in FY24, projected to exceed ₹30 lakh crore in FY25. This jump highlights PMMY’s crucial role in powering small business ecosystems in Tier-2 and Tier-3 cities and rural India, bringing about grassroots economic transformation.

From Shishu to Tarun Plus: Scaling Enterprises

The progressive lending structure of PMMY—Shishu (up to ₹50,000), Kishor (₹50,000 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh)—has helped enterprises not just launch but grow. The recent Tarun Plus initiative further extends the loan limit up to ₹20 lakh for eligible businesses. The share of Kishor loans has surged from 5.9% in FY16 to 44.7% in FY25, underlining a significant upward shift in enterprise scaling.

Economic Impact: Bigger Loans, Bigger Dreams

The average loan size has nearly tripled, from ₹38,000 in FY16 to ₹1.02 lakh in FY25, showcasing increased confidence in small entrepreneurs. This reflects a robust appetite for expansion and modernization among India’s micro business community.

Top Performing States

As of 28 February 2025, Tamil Nadu leads the country in total Mudra loan disbursals with ₹3.23 lakh crore, followed closely by Uttar Pradesh, Karnataka, West Bengal, and Bihar. Among Union Territories, Jammu & Kashmir tops the list with over ₹45,000 crore in disbursals, affirming PMMY’s deep penetration into all corners of the country.

Global Recognition

The International Monetary Fund (IMF) has consistently praised PMMY for its role in financial inclusion and women empowerment. From enabling access to finance for women-led businesses to reducing dependency on informal lenders, the scheme has earned international acclaim for its transformative impact.

Conclusion: A Revolution in Credit Access

Before 2014, India’s financial system often catered to the privileged few, while millions of budding entrepreneurs were left behind. With PMMY, India corrected that imbalance. The scheme replaced elitist banking norms with a bottom-up model of trust and empowerment, giving wings to small dreams and turning them into real businesses.

As PM Mudra Yojana enters its second decade, it stands as a beacon of inclusive progress, continuing to build self-reliance, fuel job creation, and shape a new economic narrative—one where everyone gets a fair chance to succeed.