PM Mudra Yojana Empowers Millions With Collateral-Free Loans, FM Sitharaman Confirms
PM Mudra Yojana offers collateral-free loans, aiding small entrepreneurs and promoting gender-inclusive growth nationwide.
Finance Minister Nirmala Sitharaman on Tuesday highlighted the continued impact of the Pradhan Mantri Mudra Yojana (PMMY) in promoting entrepreneurship and financial inclusion across India. The scheme provides collateral-free loans to micro and small enterprises in the non-corporate, non-farm sector, enabling aspiring entrepreneurs to start or expand businesses without the need for guarantees.
Answering questions in the Rajya Sabha, FM Sitharaman outlined the three primary categories under PMMY: Shishu (up to ₹50,000), Kishor (₹50,001 to ₹5 lakh), and Tarun (₹5 lakh to ₹10 lakh), each catering to different stages of business growth. Data as of March 31, 2025, shows stressed or non-performing assets at 12.4% for Shishu, 9.4% for Kishor, and 7.92% for Tarun, with banks actively pursuing recovery measures to ensure the scheme’s sustainability.
She also addressed the newly introduced Tarun Plus category, offering collateral-free loans up to ₹20 lakh for entrepreneurs who have successfully repaid previous Tarun loans. Launched in October 2024 following the Union Budget 2024-25, the category aims to support compliant borrowers in scaling their operations. The Finance Minister noted that, being just over a year old, the category requires time to gain traction as more entrepreneurs become aware and apply.
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Since its inception in 2015, PMMY has disbursed over ₹32 lakh crore through more than 52 crore loans, with provisional figures for FY 2024-25 adding another ₹5.5 lakh crore. Nearly 68% of beneficiaries are women, reflecting the scheme’s emphasis on gender-inclusive economic empowerment.
FM Sitharaman reaffirmed the government’s commitment to expanding credit access for small businesses, underscoring PMMY’s role in fostering self-reliance, grassroots entrepreneurship, and job creation, even as broader MSME NPAs remain relatively low at 3.6% as of March 2025.
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