Enhancing microfinance efficacy for socio-economic development: A fuzzy logic approach to Pradhan Mantri Mudra Yojana

Abstract

This study comprehensively explores the intricate dynamics between Microfinance (MF) scheme implementation and socio-economic development through rigorous empirical analysis. The focal point is to provide a well-structured, stakeholder-specific mitigation plan, empowering microfinance institutions and customers for judicious investment planning, catalyzing socio-economic development and ensuring scheme implementation efficacy. Socioeconomic development is examined specifically through the Pradhan Mantri Mudra Yojana, a prominent microfinance scheme in India that encompasses financial inclusion, employment generation, women empowerment and sustainable development. Indicators within each domain are meticulously categorized into push and pull classes, influencing customer engagement with MF schemes. Noteworthy indicators exert forces that repel or attract customers, creating a nuanced understanding. The Microfinance Scheme Effectiveness Index, computed through fuzzy logic theory, facilitates empirical assessment across states, stratifying them into levels of effective scheme implementation. Addressing ineffectiveness requires bespoke, state-specific development plans, necessitating a multi-dimensional approach involving diverse stakeholders. The study advocates for policy interventions linked to pivotal aspects such as women’s education, equal pay rights, start-up support, women representation promotion, customer training, awareness campaigns and enhanced governmental policies for structured customer involvement. In conclusion, despite robust planning systems, the effectiveness of scheme implementation faces challenges in a dynamic environment, requiring an iterative and adaptive monitoring approach.