The Pradhan Mantri MUDRA Yojana is a measure taken by the Union Government of India to ensure uninterrupted flow of liquidity to small businesses and enterprises. Launched in early 2015, it has managed to impact the trading, manufacturing and services sectors in India.
Around 6 Crore PMMY loans have been approved till the end of FY 2019. The sanctioned loan amount adds up to Rs 321722.79 Crore (Rs 3.2 Lakh Crores) while the loans already disbursed is greater than Rs 3 Crores. Most financial institutions including NBFCs lend money to applicants under the scheme.
A Pradhan Mantri MUDRA loan is essentially a business loan and comes with a MUDRA card which acts as a credit card as well. It can also be used for ATM withdrawals. Besides, these loans come with a lower payable interest rate, which makes them more attractive to the applicant.
The PMMY scheme benefits a large chunk of the population including women entrepreneurs who are comparatively fewer in number. On offer are a Credit Guarantee which ensures that availing small credits is easier, besides equipment finance and micro credit schemes.
The PMMY scheme solves the liquidity issues that many marginal businesses face. Given that fact that it is directed at non-farming and non-corporate entities, it is likely that entrepreneurship will receive a boost.