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How Pradhan Mantri Mudra Yojana Helps Women? Research Team | Posted On Thursday, May 31,2018, 07:13 PM

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How Pradhan Mantri Mudra Yojana Helps Women?



Pradhan Mantri Mudra Yojana (PMMY), aims to be an integrated financial and services support provider, so as to create an inclusive, sustainable and value-based entrepreneurial culture and achieve economic, financial and social development in India.

Mudra Yojana has proved to be the flagship scheme of the Government of India. It aims to “fund the unfunded”. It funds the non-corporate small business sectors in the country. Small borrowers are also included in the formal financial system and credit at affordable rates is extended to them. The loans under MUDRA Yojana are granted for non-farm income-generating activities.

MUDRA Loans mainly fund the Non-Corporate Small Business Sector (NCSBS). Non-Corporate Small Business Segment consists of hundreds and thousands of small businesses like proprietorships, partnership firms, small manufacturing units, service sector units, shopkeepers, fruits/vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processing units and so on in rural and urban areas.

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How Pradhan Mantri Mudra Yojana Helps Women?

The Non-Corporate Small Business Sector consists of millions of proprietorship/partnership firms. They mostly operate as small manufacturing units, shopkeepers, fruits/vegetable sellers, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others. A large portion of this sector is run by self-employed people.

According to the Harvard Business Review - Caste and Entrepreneurship in India, October 18, 2011, 57% of NCSBS are owned by Backward Classes in urban areas and 63% in rural areas. This makes NCSBS the biggest source of employment for the backward classes. NCSBS have contributed around 45% of India’s GDP, making them the largest contributors.

According to the NSSO Survey 2013 and The 12th Plan Document on Employment and Skills Development, NCSBS is the largest employment generator in India. About 5.77 Crore enterprises in this sector employ 46 Crore people. This accounts for 90% of National employment. It also produces goods and services worth Rs 6.28 Lakh Crores every year and this is the real backbone of India's economy.

Compare the employment numbers with the Corporate Sector and you will see that in spite of Liberalization, Privatization and Globalization (LPG), employment only increased by 22 Lakhs in 20 years (1991-2011). In fact, the Non-Corporate sector is the reason why economically backward people can still afford to eat food. The best way to uplift the SCs, STs and OBCs is to promote them as entrepreneurs rather than bestowing on them reservations and freebies.

What are the challenges?

The most haunting challenge is lack of financial support in this sector, because there’s little access to formal sources of finance. That’s how important a role the Pradhan Mantri Mudra Yojana (PMMY) plays.

Highlights of Pradhan Mantri Mudra Yojana:

  1. No processing fees
  2. No collateral/security
  3. A 5 years repayment period

What Loan does MUDRA offer?

Schemes under MUDRA are ‘Shishu’ (infant), ‘Kishor’ (child) and ‘Tarun’ (adolescent) which signify the funding needs of the beneficiary.

  • Shishu: This covers loans up to Rs 50,000 provided with no collateral, @1% rate of interest/month, repayable over a period of 5 years.
  • Kishor: This covers loans above Rs 50,000 and up to Rs 5 Lakhs.
  • Tarun:  Covers loans above Rs 5 Lakhs to Rs 10 Lakhs.

SEE ALSO: How Can You Improve Your Credit Score By Availing Personal Loans?

Where can you avail MUDRA Loans?

  1. PSU Banks
  2. Regional Rural Banks (RRB)
  3. Co-operative Banks
  4. Private Sector Banks
  5. Foreign Banks
  6. Micro Finance Institutions (MFI)
  7. Non Banking Finance Companies (NBFC)

How strong is the MUDRA network?

There are more than 27 Public Sector Banks, 17 Private Sector Banks, 27 Regional Rural banks and 25 Micro Finance Institutions as partners under MUDRA. To ensure smooth implementation and monitoring, 97 Nodal officers are identified at various Small Industries Development Bank of India (SIDBI) Regional offices, who are the first point of contact for MUDRA.


A major portion (78% of beneficiaries of Mudra loans) have been women entrepreneurs. They have received as much as 50% of the Rs 3,55,590 Crores, sanctioned under the scheme to help micro businesses, according to data by the Finance Ministry.

Around Rs 1,78,313 Crore worth of loans sanctioned, were to self-employed women. About 23% of the loan amounts were sanctioned to OBC beneficiaries, 10.5% to SCs and 3% to STs. In the Financial Year 2016-17 Rs 1,80,528 crores had been sanctioned under the Mudra Yojana.


  • Any Indian Citizen with a business plan for a non-farm sector whose credit need is less than Rs 10 Lakh.

Documents required:

1. Self attested copy for Identity Proof:

  • Voter’s ID Card
  • Driving License
  • PAN Card
  • Aadhaar Card
  • Passport
  • Photo Id issued by a  Government authority.

2. Proof of Residence:

  • Recent telephone bill
  • Electricity bill
  • Property tax receipt
  • Voter’s ID Card
  • Aadhaar Card
  • Bank Passbook

3. Two passport-size photographs

4. Quotation of machinery and equipments to be purchased

5. Proof of Identity of the Business:

  • Licenses
  • Registration Certificates (RC)

6. Proof of category: SC, ST, OBC or Minority Category.

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