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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