Impact of the Pradhan Mantri Mudra Yojana (PMMY) on Micro and Small Enterprises in Maharashtra

Abstract The Pradhan Mantri Mudra Yojana (PMMY), introduced in April 2015, is a transformative initiative designed to empower micro and small enterprises (MSEs) by providing financial support in India. The scheme plays a pivotal role in promoting entrepreneurship, economic empowerment, and employment generation in today’s era. This comprehensive study evaluates the socio-economic impact of PMMY on MSEs, a significant urban and industrial hub known for its entrepreneurial ecosystem in Maharashtra. By employing a mixed-methods approach, the research integrates quantitative data analysis with qualitative insights derived from interviews with Mudra loan beneficiaries and local financial institutions in Maharashtra. It examines the scheme's outreach, accessibility, and economic benefits, emphasizing how PMMY facilitates business growth, revenue enhancement, and market expansion among MSEs and benefiting the business. The results show that PMMY has both directly and indirectly greatly accelerated enterprise development, promoting sustainability, business scalability, and job creation. Nonetheless, issues still exist, such as difficulties in obtaining loans, ineffective procedures, and complicated repayment terms, especially for underserved populations. A comprehensive evaluation of the PMMY portfolio's financial health in Maharashtra highlights the need for improved risk management, efficient procedures, and borrower-focused support mechanisms. Additionally, the socio-economic assessment emphasizes beneficiaries increased financial inclusion, higher social status, and better quality of life, confirming PMMY's capacity to reduce poverty. The study concludes with strategic policy recommendations aimed at optimizing PMMY implementation, ensuring broader outreach, sustained benefits, and inclusive economic growth for Maharashtra's micro and small enterprises.