"Effectiveness of MUDRA Loans in Promoting Women Entrepreneurship"

Abstract

“Effectiveness of MUDRA Loans in Promoting Women Entrepreneursliip” focuses on analyzing tiie impact of the Pradhan IVIantri IVIudra Yojana (PIVIIVIY) on the development of women entrepreneurs in India. Introduced in 2015, the MUDRA scheme aims to provide collateral-free financial assistance to micro and small enterprises through three categories — Shishu, Kishor, and Tarun. The initiative has played a key role in promoting financial inclusion and encouraging self-employment among women, especially in the informal sector.

This study is based on secondary data collected from reliable sources such as RBI and NABARD reports, the Ministry of Finance, and various research publications for the period 2020-2025. The objectives include analyzing the financial performance of the MUDRA scheme, studying trends in loan sanctions and disbursements to women entrepreneurs, and identifying major challenges faced by them in accessing these loans.</p.

The analysis reveals that the total number of loans sanctioned and the amount disbursed underthe MUDRA scheme have shown steady growth from 2020-21 to 2023-24, indicating rising participation of women in entrepreneurial activities. However, there was a marginal decline in 2024-25, pointing to a temporary slowdown in disbursements. Most women beneficiaries are found underthe Shishu and Kishor categories, showing their dominance in small-scale enterprises such as tailoring, food processing, and handicrafts.

The findings also highlight several challenges — including lack of awareness, procedural barriers, insufficient training, limited collateral support, and inadequate post-loan assistance. These issues restrict women from fully utilizing the benefits of the scheme and achieving business sustainability.

The report concludes that MUDRA loans have made a significant contribution to women's empowerment by promoting entrepreneurship, generating income, and creating employment opportunities. However, to further enhance the scheme's effectiveness, it is recommended that policymakers emphasize capacity building, financial literacy, digital access, and skill development programs. Strengthening post Loan monitoring and mentorship support will ensure long-term success and sustainable growth of women-ied enterprises under the MUDRA scheme.