A POLICY REVIEW: ENHANCING THE EFFECTIVENESS OF PMMY FOR ECONOMIC EMPOWERMENT
DOI:
https://doi.org/10.65009/rvyyyd96Keywords:
MUDRA, economic empowerment, microfinance, financial inclusion, entrepreneurship, , small enterprises, India, sustainable development,,Abstract
The Pradhan Mantri MUDRA Yojana (PMMY) was launched in 2015 as a flagship
initiative by the Government of India to empower micro and small enterprises (MSEs) through
collateral-free credit. This review article critically examines the policy framework of PMMY
and its role in fostering economic empowerment across diverse socio-economic segments,
particularly marginalized communities. The article provides an in-depth analysis of the
scheme’s objectives, implementation strategies, and achievements while identifying gaps and
proposing recommendations for enhancing its effectiveness. The review begins by
contextualizing PMMY within India’s broader agenda of financial inclusion and sustainable
development. By offering financial support through three loan categories—Shishu, Kishor, and
Tarun—the scheme targets nascent entrepreneurs and small business owners, enabling them to
contribute to the economy. The study highlights the scheme’s tangible benefits, including its
contribution to employment generation, the promotion of self-reliance among rural and urban
entrepreneurs, and the facilitation of financial access for women and weaker sections of society.
Despite its significant achievements, PMMY faces challenges that hinder its potential to drive
comprehensive economic empowerment. These include inadequate outreach to remote areas,
limited financial literacy among beneficiaries, and difficulties in assessing creditworthiness
without collateral. The integration of data analytics and fintech solutions can aid in monitoring
loan performance and mitigating risks. The future prospects of PMMY lie in its alignment with
India’s digital transformation initiatives and its potential to contribute to the Sustainable
Development Goals (SDGs). By refining its policy framework and implementation strategies,
PMMY can emerge as a cornerstone for inclusive economic growth. This review article not
only highlights the scheme’s transformative potential but also calls for continuous innovation
and collaborative efforts to maximize its effectiveness in empowering micro and small
enterprises.
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