New Delhi, March 17 (NationPress) Finance Minister Nirmala Sitharaman has reiterated the significant impact of the Pradhan Mantri Mudra Yojana (PMMY) in empowering small entrepreneurs throughout India by providing collateral-free loans. This initiative allows countless individuals to transform their business visions into reality without the encumbrance of collateral or guarantees.

Responding to inquiries in the Rajya Sabha about the scheme's effectiveness, FM Sitharaman pointed out that PMMY categorizes loans into three primary segments: Shishu (up to Rs 50,000), Kishor (Rs 50,001 to Rs 5 lakh), and Tarun (Rs 5 lakh to Rs 10 lakh). These tiers support businesses at various growth phases, ranging from startups to expanding firms, thereby promoting financial inclusion for micro and small enterprises in the non-corporate, non-farm sector.

As of March 31, 2025, the latest statistics indicate the recovery performance across these categories. Non-performing assets (NPAs) or outstanding loans classified as stressed are at 12.4 percent in the Shishu category, 9.4 percent in the Kishor category, and 7.92 percent in the Tarun category.

Banks are actively engaging in recovery efforts to manage these amounts, showcasing ongoing initiatives to ensure the scheme's sustainability while assisting borrowers.

FM Sitharaman also addressed concerns regarding the relatively modest disbursement under the newly introduced Tarun Plus category, which offers collateral-free loans up to Rs 20 lakh for those entrepreneurs who have successfully repaid their earlier Tarun loans.

Initiated following the announcement in the Union Budget 2024-25 and effective from October 2024, Tarun Plus aims to reward compliant borrowers and further expand their business operations.

FM Sitharaman noted that the scheme is still in its infancy, stating, “To properly assess this scheme, we need to allow it some time as it is just a year old.”

She highlighted the importance of patience to let this category gain momentum as more eligible entrepreneurs learn about it and apply after demonstrating repayment reliability.

Since its launch in 2015, PMMY has disbursed over Rs 32 lakh crore through more than 52 crore loans (with provisional FY 2024-25 figures indicating additional sanctions of around Rs 5.5 lakh crore). A remarkable 68 percent of this support has gone to female entrepreneurs, fostering gender-inclusive growth and grassroots economic empowerment.

The government is dedicated to widening credit access for small businesses, with recent extensions and enhancements reflecting its commitment to self-reliance and job creation.

FM Sitharaman's remarks come during broader discussions on the health of the financial sector, where overall MSME NPAs remain comparatively lower at approximately 3.6 percent as of March 2025, contrasting with Mudra-specific figures.