PMMY is Driving Women Empowerment at the Grassroots Level: SBI report
Pradhan Mantri Mudra Yojana (PMMY) is emerging as a potent instrument in pushing financial inclusion and economic growth, especially in underdeveloped states, as per a recent SBI Research report. The report points out that Mudra disbursements have a stronger effect on states with weaker financial inclusion, filling economic gaps in less-developed parts of the country.
The findings show that countries with a larger proportion of Mudra loans allocated to women have experienced significant employment generated by women-owned Micro, Small, and Medium Enterprises (MSMEs). The finding highlights the significance of policy-induced financial inclusion aimed at promoting women's economic contribution and empowerment, particularly in rural and marginalized communities.
"Financial inclusion statistics indicate that disbursements from Mudra make a more potent contribution to weaker states in financial inclusion terms", the SBI report said. Such states of Bihar, UP, Odisha, and North East have increased sharply in Mudra loan proportions. For example, the disbursement share of Bihar increased from 5.67 per cent to 10.97 percent, and that of UP increased from 9.27 per cent to 11.30 per cent, which shows a strategic alignment towards more development-needy areas.
The report further identifies a healthy structural change in Mudra disbursements, where though developed regions of the country are getting a lesser share, underdeveloped regions are getting more and more financial support. This realignment reflects the government's emphasis on reducing regional imbalances and promoting inclusive growth.
Launched. in 2015, the PMMY program was established by the Government of India under Micro Units Development and Refinancing Agency (MUDRA) to extend collateral-free loans of up to Rs 20 lakh to micro-enterprises. Such loans are extended by different lending institutions like commercial banks, regional rural banks, and microfinance institutions such as NBFCs-MFIs and Small Finance Banks.
The report also mentions that women are increasingly availing the benefits of PMMY loans, with 68 per cent of account holders under the programme being women. During the last nine years, the per woman disbursement level under PMMY increased by a compound annual growth rate (CAGR) of 13 per cent to Rs 62,679, whereas incremental deposits of women borrowers went up by a CAGR of 14 per cent to Rs 95,269.
SBI Research concludes that PMMY is not merely a financial tool but a potent vehicle for empowering women at the grassroots level in transforming India's most financially underprivileged areas' economic scenario.
