Analyzing the Financial Performance of the Pradhan Mantri MUDRA Yojana in India 2016-2024: An Econometric Case Study

Abstract

Aims: The Pradhan Mantri MUDRA Yojana (PMMY), launched in 2015, aims to promote financial inclusion and entrepreneurship among non-corporate, non-farm micro and small enterprises. This study provides a financial analytics-based assessment of PMMY loan disbursements from FY 2016–17 to FY 2023–24, analysing regional trends, category-wise distribution like Shishu, Kishore, and Tarun, institutional performance, and capital adequacy Study Design: This study uses a quantitative research methodology to assess the financial performance of the Pradhan Mantri MUDRA Yojana (PMMY) Place and Duration of Study: This study uses a quantitative research methodology to assess the financial performance of the Pradhan Mantri MUDRA Yojana (PMMY) from FY 2016–17 to FY 2023–24. Methodology: By combining Descriptive and Analytical research designs, it aims to identify patterns and trends across institutional types, loan categories, and regions. Grounded in Secondary Data from MUDRA Annual Reports, the PMMY Dashboard, and sources like the Reserve Bank of India and NABARD, the analysis employs various financial analytics and statistical tools. Key methodologies include Descriptive Statistics like Mean, Standard Deviation, Coefficient of Variation, and ANOVA for differences in loan performance. Additionally, the study calculates Compound Annual Growth Rate (CAGR) to evaluate performance over time. Results: The results reveal a threefold increase in total disbursement—from ₹1.80 lakh crore in 2016–17 to ₹5.32 lakh crore in 2023–24. South and East regions consistently led in disbursement, while Shishu loans dominated in volume. However, Kishore and Tarun categories showed higher financial allocation and variability. Public sector banks led in volume, while private and small finance banks showed higher efficiency. ANOVA confirmed statistically significant differences across categories and regions. Capital adequacy showed growth with fluctuations. Conclusion: This study highlights the success of PMMY in enhancing credit access, while also identifying regional and institutional imbalances. The findings are useful for policymakers and financial institutions to improve implementation, ensure equity, and strengthen microenterprise development.