Changing financial landscape through mudra yojana - A journey towards entrepreneurial ecosystem

The government of India launched Pradhan Mantri Mudra Yojana (PMMY) on 8 April, 2015 to fund the unfunded. This initiative has high potential to change the entrepreneurial ecosystem in country and achieve economic inclusion of the informal sector members. Hence, the study is proposed to evaluate the said potential of the initiative.

The study is descriptive study based on primary data of 288 Mudra loan beneficiaries and 42 bank officials of Nagpur district of Maharashtra State, India. The data collected was quantitative based on various attributes using a structure questionnaire for beneficiaries pre and post-Mudra loan and bank officials to evaluate the impact of Mudra loans on Entrepreneurial activity of small and informal businesses.

The analysis shows that the beneficiaries in Nagpur district received loans as per their requirements. The employment, average salary paid, number of suppliers, monthly purchases from suppliers, investment in fixed capital and approximate profits all have increased significantly in all the categories of Mudra loan and in overall Nagpur district post- Mudra loans and created good expansionary effect for businesses.

A new process of Loan disbursal is recommended to avoid the leakage in the process and avoid possible defaults. The new process can help not only to achieve the financial inclusion, but also will create an entrepreneurial ecosystem that will foster equity for every participant member.