Priyanka Tiwari
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The Pradhan Mantri Mudra Yojana (PMMY), launched to provide loans to small and micro enterprises, has made notable strides in improving financial inclusion over the past decade. A recent report by the State Bank of India (SBI) reveals a shift in loan disbursement patterns, with more focus on states that historically had limited access to formal credit.
Bihar, Uttar Pradesh, Odisha, and North-east See Substantial Gains
According to the SBI report:
Bihar's share of PMMY loans rose from 5.67% in FY16 to 10.97% in FY25
Uttar Pradesh saw an increase from 9.27% to 11.30%
Odisha's share moved from 4.24% to 4.51%
North-eastern states also experienced consistent growth in loan access
This redistribution of credit reflects a more inclusive approach, enabled by targeted policy measures and the expansion of digital lending tools.
Policy Support and Digital Tools Drive Inclusion
The report credits this shift to strategic government interventions and the introduction of digital platforms such as:
PSB Loans in 59 Minutes
UdyamiMitra
Unified Lending Interface (ULI)
These platforms have simplified access to microcredit, especially in regions previously underserved by traditional banking systems.
Loan Volume and Ticket Size Show Robust Growth
In the last 10 years, PMMY has sanctioned over ₹33 lakh crore in loans. The average loan ticket size increased from ₹38,000 in FY16 to ₹1.02 lakh in FY25, indicating the rising scale and confidence of small businesses under the scheme.
While Maharashtra, Tamil Nadu, and Karnataka continue to receive large volumes of loans, the increasing share in other states marks a significant policy success.
Challenges and Way Forward
Despite positive trends, the SBI report warns of persistent hurdles:
Infrastructure limitations
Lack of financial literacy
Skill development gaps
To ensure long-term success, the report recommends strengthening capacity building, market linkages, and awareness programs, particularly in newer geographies gaining traction under PMMY.
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