Role of MUDRA Yojana in financing women entrepreneurs in India

Abstract

After agriculture, microenterprises are a major economic segment that provides large employment opportunities. According to the 2021–2021 annual report for MSMEs [micro, small, and medium enterprises], there were 630.52 lakhs of microenterprises, 1076.19 lakhs of people gained employment opportunities, and 30.27% to India’s GDP came from these microenterprises. Microfinance is the tool to reduce poverty and income inequality and to provide financial services for self-employment opportunities to underprivileged citizens in both rural and urban areas. To promote gender equality and entrepreneurial spirit, it is necessary to finance women’s empowerment. PMMY [Pradhan Mantri MUDRA Yojana] and MUDRA [Micro Units Development and Refinance Agency Ltd.] by the Government of India aims at providing financial support to the NCSBS [Non-Corporate Small Business Sector]. Usually these sectors operate as unregistered enterprises and are not covered under taxation, and they face a lack of financial support from banks and other financial institutions. MSE borrower accounts stood at 5.37 crore rupees, with a financial support of 32.14 crore rupees as of 2021– 2022. MUDRA provides refinance to microenterprises through various financial institutions like private sector banks, public sector banks, co-operatives, and MFIs [Micro Finance Institutions]. This article aims to understand the background of MUDRA Yojana, the activities covered, the schemes under MUDRA Yojana, and the overall performance of MUDRA Yojana in financing women entrepreneurs in India. MUDRA has come up with various digital supports that enable the entrepreneurs to access various financial needs.