Factors Determining the Impact of Mudra Yojna in Financial Inclusion & Entrepreneurship Development- An Empirical Study

Abstract

Small enterprise playsa pivotal role in the Nation by generating a substantial number of employments for the people. Small enterprise is responsible for employing the illiterate and unskilled workers and is also being considered as the second highest proportionate sector in terms of employment generation after the agriculture sector. But, innumerable number of individuals in the impoverished income group strives hard in establishing small enterprises but fail to launch them, typically because of finance restrictions. The Pradhan Mantri Mudra Yojana (PMMY) has moved away from its original concentration on microfinance and is now concentrating on providing loan to the lower-income group which is an important government initiative that promotes Micro, Small, and Medium Enterprise’s (MSMEs) access to loans.

The MSME sector defines entrepreneurs and is a key engine of India's socioeconomic growth which contributes in the country's Gross Domestic Product (GDP) by 29.15%.In the All India manufacturing Gross Value Added (GVA), the share of MSME manufacturing GVA is around 40.83% and in all India export, the share of export pertaining to MSME related products is 45.56%.Overall, it has contributed significantly to the promotion of entrepreneurship and financial inclusion, both of which are critical for long-term economic success. However, issues persist, such as ensuring efficient use of funds and improving borrowers' financial literacy.

This paper is an endeavour to analyse the significance of MUDRA’s eminent stems from its complete approach to stimulate entrepreneurship, boosting financial inclusion, and assisting with employment generation, all are necessary for long-term economic development. Analysing these dimensions reveals vital information about its effectiveness and places for development.