Prime Minister Narendra Modi launched the Pradhan Mantri MUDRA Yojana (PMMY) in 2015 to provide low-cost credit to microfinance and non-banking financial institutions in order to lend to micro, small and medium enterprises and generate jobs and incomes in manufacturing, services, retail, agriculture and allied activities.

The Micro Units Development & Refinance Agency (MUDRA) was established as part of the exercise. Now in its 10th year, the scheme has allowed the government to fund the unfunded, PM Modi said in a written interview to ET on the scheme. Edited excerpts:

What were your expectations from the MUDRA Yojana and has it achieved them?

The MUDRA Yojana needs to be seen in a particular context and not as a standalone scheme. Even before I held any government position, I had travelled extensively across the country for many decades as a karyakarta. There was a common theme that I saw everywhere. A vast majority of our population, such as the poor, farmers, women and marginalised sections had aspirations for growth, strong spirit of enterprise, energy and resilience-all qualities needed to be a successful entrepreneur. But these were the very sections that had been completely excluded from the formal banking and financial system.Tell me, if you do not have a bank account, will you ever visit a bank? When people did not even have access to basic banking, funding for entrepreneurship looked like a distant dream.So, when the people voted for us in 2014, we decided to make the whole financial architecture people-centric and inclusive, so that we could give wings to their aspirations. We democratised the financial system.This started with 'banking the unbanked' with Jan Dhan Yojana. Once those who were left out and left behind began to become part of the formal financial system through this scheme, we went on to 'funding the unfunded' through the MUDRA Yojana and 'insuring the uninsured' through the Jan Suraksha portfolio of schemes.So, MUDRA is part of a larger vision to ensure that the entrepreneurial ability, innovation, creativity and self-reliance of the people at the grassroots is respected, celebrated and supported.Through the MUDRA Yojana, we wanted to give a message to every Indian, that we had trust in their abilities and we would stand as a guarantee in their journey to fulfil their aspirations. Trust begets trust. The people too responded with great zeal and today, with over 52 crore loans given worth ₹33 lakh crore, they have made MUDRA a massive success.

One of the concerns over the scheme has been high NPAs and consequently the underwriting burden on the government. Do these need to be addressed or would you say this is a justified cost for the impact the scheme has had?

There are two perspectives on the problem of NPAs. On the one hand, we have experience from the tenure of the Congress-led United Progressive Alliance. Then, the banking sector operated under a system that came to be known as 'phone banking'.Loans were sanctioned based on calls from political connections rather than on competence, or adherence to strict financial due diligence.We all know how this created the twin balance sheet problem. This period, marked by a lack of transparency and accountability, left public sector banks grappling with a legacy of stressed assets, undermining their ability to support broader economic growth.On the other hand, we lent money to the poor and the middle class through the MUDRA Yojana. It was designed to empower small and medium entrepreneurs who had no connections but had competence and conviction.Unlike the UPA's top-heavy lending model, MUDRA focused on grassroots economic activity. Today, with more than 52 crore loan accounts, MUDRA reflects the massive scale and ambition we had.When we launched this initiative, several prominent Congress leaders and commentators from their ecosystem said that extending credit to crores of small-scale borrowers will cause an NPA issue. They had no trust in the poor and middle class of our country. But the outcomes have defied these predictions.What stands out is the performance of these loans-just 3.5% have turned into NPAs. This is an exceptionally low default rate in this segment world over.While the UPA's phone banking era left banks burdened with toxic assets and favoured select elites of those who were close to power centres, MUDRA has redirected resources to the grassroots, fostering entrepreneurship without compromising financial stability.

The banking sector is in sound health today. Do you think it can take on more risks and fund those lacking formal credit access through schemes such as MUDRA, while corporate borrowers access funds through the bond market?

Due to our relentless banking reforms and deft handling of the NPA crisis, today, our banks are in good health again. Many of them have touched record profits.Over the last decade, programmes such as MUDRA, PM-Svanidhi and Standup India have benefited from the improving health of our banks. Further, due to these schemes, our banking system has also become more responsive towards the needs of small entrepreneurs. As a result, the poor and middle class have reduced their reliance on informal lending to a great extent.I am confident that our banking sector will continue to be a strong partner in the journey of ensuring financial inclusion and supporting entrepreneurship at the grassroots.When it comes to the question of funding small entrepreneurs or corporate borrowers, our banks are capable of supporting both segments and it is not a zero-sum game.This year our corporates raised more than ₹1 trillion through the bond market. This will continue to grow as bond markets are also maturing. Similarly, the MSMEs have started raising money through IPOs and people are appreciating that too. Indian banks will maintain an equilibrium when it comes to priority sector lending as well as corporate lending. This balanced strategy strengthens both financial stability and equitable growth, setting a sustainable path forward as the system continues to mature.

The scheme especially focused on the deprived and women.

Reaching out to the deprived has been the hallmark of this scheme. Vanchit ko variyata, mainstreaming the marginalised-this has been our motto.For decades, affordable credit used to be available only to the rich and well-connected. Unfortunately, the entrepreneurship efforts of the deprived were often trapped in the Chakravyuh of high compounding interest rates. Through MUDRA Yojana, even the deprived are able to get a loan without any collateral.So when we celebrate the success of MUDRA Yojana in promoting entrepreneurship, the heartening aspect is that a large number of these success stories are from women and deprived groups.With over 52 crore loans sanctioned, it has proved to be a lifeline for small and micro businesses in the non-corporate, non-farm sector-areas where SC, ST communities and women often operate. Half of all the loans have gone to people belonging to SC, ST, OBC communities. Nearly 70% of these loans went to women, which shows it's hitting the mark on women's empowerment and financial inclusion.For someone from a deprived background or a woman with a business idea-like a small shop or manufacturing unit such as MSME setup-this scheme has offered real support to turn dreams into reality. This is more than just an entrepreneurship opportunity for the deprived population but it is an inflection point in their lives where their conviction and ideas win over all kinds of doubts and challenges, with the government standing as the guarantor for their loans.

One of the goals of MUDRA was encouraging entrepreneurship and creating employment, especially in rural areas to discourage migration.

The MUDRA Yojana has brought about a fundamental mindset shift in society today. Entrepreneurship, which was considered somewhat of an elite endeavour, has now been democratised.Today, entry barriers to entrepreneurship, actual and perceived, have been reduced significantly and the MUDRA Yojana has been the force behind this change.Today, every layer of our society is thinking of entrepreneurship and growth. Small ideas are blossoming into MSMEs, MSMEs into successful startups and startups into unicorns.Out of the 52 crore loans given under MUDRA, over 10.6 crore have gone to first-time entrepreneurs! You have to understand that there are successful entrepreneurs who have been empowered by MUDRA Yojana in every part of the country, which means there is success in every part of the country.These new entrepreneurs have set off localised growth cycles. These new entrepreneurs are hiring more people, building bigger offices, supporting and collaborating with other businesses at a local level.Today, many youths in tier 2 or tier 3 cities prefer staying close to home rather than moving to metro cities. Low cost of housing, good education, ease of travel, ease of communication and increased avenues for entrepreneurship offer them a lucrative deal.The value addition of these entrepreneurs is being witnessed in our national growth.

How has the scheme evolved over the last decade and what next?

Let us look at the scale of the loans and the amount disbursed under the MUDRA Yojana. Over 52 crore loans worth ₹33 lakh crore have been disbursed.This means 1.6 loans have been given every second, which is faster than even a heartbeat. The total amount sanctioned is higher than the GDP of 100 countries.To give you an idea of how the scheme has progressed, an analysis of the total loans sanctioned/disbursed under the scheme shows that since its launch, the average ticket size of the loans has nearly tripled-from ₹39,000 in FY16 to ₹73,000 in FY23 to ₹1.05 lakh in FY25.In this year's budget, we have raised the upper threshold for loans to ₹20 lakh.Around MUDRA, we have worked on enhancing our digital public infrastructure as well. Beyond JAM and digital payments, we have the account aggregator (AA) framework that ensures paperless loans for everyone. With loans and ease of credit, we wanted to ensure ease of doing business online in a digital world, and therefore, we have the Open Network for Digital Commerce (ONDC). Think of it as UPI for online commerce, where entrepreneurs, especially the ones in second-tier towns and villages, will no longer be dependent on big platforms who they are compelled to share their profits with.The future of MUDRA is already before us with the AA framework and ONDC, and the first-time bank account holders a decade ago are now evolving with the economy, creating a rich credit history, which will tomorrow be beneficial for them in further expanding their business operations.

He regarded the India-led green initiatives as platforms for all nations to collectively address climate change, promote environmental sustainability, build disaster resilient infrastructure, and drive the global transition towards clean energy.

Source: The Economic Times

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Monsoon Session is a symbol of India’s rising stature, and democratic strength: PM Modi
July 21, 2025
QuoteThe Monsoon Session stands as a proud moment for the nation, a true celebration of our collective achievements: PM
QuoteThe world has witnessed the strength of India's military power; In Operation Sindoor, Indian soldiers achieved their objective with 100% success: PM
QuoteIndia has endured many violent challenges, be it terrorism or Naxalism, but today, the influence of Naxalism and Maoism is shrinking rapidly: PM
QuoteThe Constitution prevails over bombs and guns. The red corridors of the past are now transforming into green zones of growth and development: PM
QuoteDigital India is making waves globally, with UPI gaining popularity across many countries, it has become a recognised name in the world of FinTech: PM
QuoteThe brutal massacre in Pahalgam shocked the entire world. Rising above party lines, representatives from across India united to expose Pakistan's role: PM

Namaskar, friends!

I welcome all members of the media fraternity to the Monsoon Session.

Friends,

The monsoon symbolises freshness and creation. According to the reports received so far, the weather across the country is progressing favourably, with news of a season beneficial for agriculture. Rain plays a crucial role not only in the economy of our farmers but also in the national economy, the rural economy, and indeed in the economy of every household. Based on the information I have received, the water storage this year has been nearly three times higher than what has been recorded in the past ten years, which will greatly benefit the country’s economy in the days to come.

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Friends,

This Monsoon Session is a matter of immense pride for the nation. This session, in itself, is a celebration of victory for the country. When I say that this session is a celebration of national pride and triumph, the foremost reason is the unfurling of the Indian tricolour for the first time at the International Space Station — a moment of immense pride for every Indian. It has been a successful journey that has filled the nation with renewed enthusiasm and excitement for science, technology, and innovation. The entire Parliament — both the Lok Sabha and Rajya Sabha — along with the citizens of the country, will join in a unified voice to celebrate this achievement. This unified appreciation will also serve as an inspiration and encouragement for Bharat's upcoming space missions that aim to reach greater heights.

Friends,

This Monsoon Session is indeed a celebration of triumph. The entire world has witnessed the strength of Bharat's military capabilities. During Operation Sindoor, the Indian armed forces achieved their objectives with 100 percent success. Within just 22 minutes, the mission neutralised its target right inside the enemy's territory. I had announced this during a programme in Bihar, and our armed forces accomplished it within a very short time. The new face of our ‘Made in India’ military strength has attracted global attention. These days, when I meet global leaders, there is growing interest in the indigenous defence equipment being developed in Bharat. I firmly believe that when Parliament, in one unified voice, expresses sentiments of victory during this session, it will further strengthen and inspire our armed forces. It will serve as motivation for the country and will provide a boost to research, innovation, and manufacturing in the defence sector. The ‘Made in India’ defence equipment will gain further momentum, creating new employment opportunities for our youth.

Friends,

This decade may well be described as a time where peace and progress are advancing hand in hand. We are experiencing development at every step. The nation has long suffered from various forms of violence, ever since independence — be it terrorism or Naxalism. Some of these issues may have emerged earlier, some later. However, today the sphere of influence of Naxalism and Maoism is shrinking rapidly. With a firm resolve to uproot Maoism and Naxalism from its roots, our defence forces are progressing towards success at a fast pace and with newfound confidence. I can say with pride that hundreds of districts across the country, once gripped by Naxal influence, are now breathing the air of freedom. We take pride in the fact that our Constitution is triumphing over bombs, guns, and pistols — our Constitution is emerging victorious. It is clearly evident that the regions once labelled as the Red Corridor are now transforming into zones of green growth, symbolising a bright future for the nation.

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Friends,

One after another, such events serve as moments of pride for every honourable Member of Parliament who has entered this House in service of the nation and its well-being. And during this session of Parliament, the entire country will hear this tale of pride — from every Member of Parliament, from every political party.

Friends,

When you entrusted us with responsibility in 2014, the country was passing through a phase where it was counted among the Fragile Five economies. Before 2014, we ranked 10th in the global economy. Today, Bharat is rapidly progressing towards becoming the world’s third-largest economy. These days, the upliftment of 25 crore poor people out of poverty is being widely appreciated by numerous international institutions. There was a time in the country, before 2014, when the inflation rate used to be in double digits. Today, with inflation coming down to around 2 percent, it has brought relief and comfort to the common man. Low inflation, accompanied by high growth, reflects a healthy and progressive developmental journey.

Friends,

The world is now witnessing and recognising the new capabilities of Bharat through Digital India and UPI, which are generating considerable global interest. UPI has carved a distinct identity for itself in the Fintech world. Bharat now leads the world in real-time digital transactions.

Friends,

Recently, there was a global conference of the International Labour Organization, where Bharat achieved a major milestone. According to the ILO, over 90 crore people in Bharat are now covered under social security — an enormous achievement in itself. Similarly, the World Health Organization (WHO) has declared Bharat free from trachoma — an eye disease commonly seen during the monsoon season. This is another significant accomplishment for Bharat in the field of public health.

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Friends,

The brutal killing, atrocities, and massacre in Pahalgam had shocked the entire world. Attention turned towards the terrorists and their masterminds. At that moment, setting aside party interests and working in the national interest, representatives of most political parties and states travelled around the globe to various countries and led a successful campaign to expose Pakistan — the hub of terrorism — before the world. Today, I wish to commend all those Members of Parliament and political parties for this important work done in the national interest. Their efforts created a positive atmosphere in the country. The world opened its doors to hearing and accepting Bharat's perspective. I consider it my privilege to applaud our Members of Parliament and political parties for this.

Friends,

We know how the spirit of unity and a collective voice fills the nation with great enthusiasm. This celebration of victory will also be reflected in the Monsoon Session with the same spirit — it will appreciate the strength of our armed forces, glorify the nation’s capabilities, and serve as a new source of inspiration for 140 crore Indians. I firmly believe that all of us, together, must strengthen our efforts towards self-reliance in the defence sector and appreciate the might of our armed forces. Today, I must say to the people of the country, and to all political parties, that the nation has witnessed the power of unity and the strength of one collective voice. Honourable Members of Parliament must also strengthen and advance this spirit within the House. I accept the reality that political parties are different — each has its own agenda, its own role. But I also acknowledge this truth: even if minds do not meet on party interests, they must come together on national interest. With this very sentiment, many important bills — which will strengthen the nation’s journey of development, advance the country's progress, and empower its citizens — have been proposed for this Monsoon Session. I am confident the House will conduct detailed discussions and pass them.

My best wishes to all Honourable Members of Parliament for meaningful and constructive debates.

Thanks a lot!