Launched: 8 April 2015
Main Objective: Financial support for growth of micro enterprises sector.

Pradhan Mantri MUDRA Yojana (Micro Units Development and Refinance Agency) was launched with the purpose to provide funding to the non-corporate small business sector. Pradhan Mantri Mudra Yojana (PMMY) is open and is available from all Bank branches across the country.

The small businesses/startups or entrepreneurs can avail loans from Rs. 50 thousand to 10 Lakh to start/grow their business under the three, Shishu, Kishore and Tarun categories of the scheme.

As per the official website of PMMY, 27344053 number of loans have been sanctioned under the scheme till 26 February 2016. The amount sanctioned has reached more than Rs. 1 Lakh Crore.


  1. There is a potential of conflict of interest due to the nature of roles and responsibilities of Mudra Bank.
  2. Mudra bank seems to be promoting shadow banking as its operations are not under the administration and regulation of Reserve Bank of India (RBI). As such, there is a chance of potential operational risk when Mudra Bank grows in size.
  3. There is a better solution to finance micro and small businesses. It make sense to create small banks to finance micro and small business segment or migration of the existing MFIs to small banks than creating one more financing agency. They already have the required domain knowledge.
  4. In the past similar attempts were made by the then Prime Minister Indira Gandhi, by nationalizing banks and compelling them to lend to small and micro businesses. Therefore it is questionable that how Mudra bank initiative will be any different from past attempts.

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