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Explainer: How Mudra loans are helping India's micro-enterprises
India's Pradhan Mantri Mudra Yojana (PMMY) is fueling small businesses, with most borrowers—about 79%—taking Shishu loans for micro-enterprises.
In the last financial year (2024-25), PMMY handed out ₹5.52 lakh crore in loans, helping local ventures like cycle repair shops and flour mills, especially in rural areas.
PMMY has supported nearly 10 crore people
Since launching in 2015, PMMY has supported nearly 10 crore people to start or grow their own businesses through banks and NBFCs.
The scheme offers three loan sizes—Shishu, Kishore, and Tarun—but most people stick with the smallest option.
While it's a big boost for self-employment and rural economies, there's still a challenge: about 9.8% of these loans are now classified as non-performing assets (NPAs) as of March 2025.