Union Finance Minister Nirmala Sitharaman has reaffirmed the significant role of the Pradhan Mantri Mudra Yojana (PMMY) in supporting small entrepreneurs by providing collateral-free loans across India.
Replying to a question in the Rajya Sabha, the minister said the scheme has enabled millions of individuals to turn their business ideas into reality without the burden of security or guarantees.
Three Loan Categories to Support Business Growth
Under PMMY, loans are provided across three categories based on business needs:
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Shishu: Up to ₹50,000
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Kishor: ₹50,001 to ₹5 lakh
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Tarun: ₹5 lakh to ₹10 lakh
These categories cater to businesses at different stages—from startups to expansion—primarily in the non-corporate, non-agricultural micro and small enterprise sector.
NPA Levels Indicate Recovery Trends
As per data till March 31, 2025, non-performing assets (NPAs) under PMMY stand at:
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12.4% in Shishu category
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9.4% in Kishor category
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7.92% in Tarun category
Banks are actively working to recover outstanding loans, balancing borrower support with the sustainability of the scheme.
‘Tarun Plus’ Scheme to Support Growing Businesses
Addressing concerns over lower disbursement under the newly introduced ‘Tarun Plus’ category, Sitharaman said the scheme is still in its early phase.
Launched after the Union Budget 2024-25 and effective from October 2024, Tarun Plus offers:
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Collateral-free loans up to ₹20 lakh
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Eligibility for borrowers who have successfully repaid previous Tarun loans
The scheme aims to reward disciplined borrowers and support business expansion.
Government Calls for Patience on Tarun Plus Rollout
The Finance Minister emphasized that the scheme is less than a year old and requires time to gain traction.
She noted that as awareness grows and more eligible entrepreneurs apply, the uptake of Tarun Plus loans is expected to increase.
Over ₹32 Lakh Crore Loans Disbursed Since Launch
Since its launch in 2015, PMMY has:
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Disbursed over 52 crore loans
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Sanctioned more than ₹32 lakh crore
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Approved an additional ₹5.5 lakh crore loans in FY 2024-25 (provisional)
Notably, around 68% of the loans have been extended to women entrepreneurs, promoting gender-inclusive growth and grassroots empowerment.
MSME Sector Remains Financially Stable
The minister highlighted that the broader MSME sector remains stable, with overall NPAs at around 3.6% as of March 2025, significantly lower than Mudra-specific figures.
Boost to Financial Inclusion and Employment
The PM Mudra Yojana continues to play a crucial role in:
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Expanding access to credit
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Promoting entrepreneurship
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Generating employment
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Strengthening the MSME ecosystem
The government remains committed to enhancing credit availability and supporting small businesses to drive inclusive economic growth.
