PMMY seeding ecosystem of empowered, economically active women in India

In a media report, Aditya Sinha, OSD, Research at Economic Advisory Council to the Prime Minister, stated how the PMMY is empowering women-led growth in the country.

The scheme enables access to collateral-free credit for micro and nano enterprises.

“More than a financing scheme, PMMY reconfigures the social contract between the state and the citizen by recognising the poor, especially women, as latent entrepreneurs rather than passive welfare subjects,” Sinha said.

A combination of institutional, cultural, and informational asymmetries has previously stunted the long-run growth potential of women-led enterprises.

But PMMY eliminates "the requirement for collateral, reducing transaction costs, and decentralising credit access through non-banking financial institutions and microfinance intermediaries”, Sinha said.

From being just an unpaid household labour or seasonal wage worker, women are now actively starting microenterprises such as tailoring units, beauty parlours, food stalls, agri-processing ventures, and retail shops.

Sinha called the transition “deeply social”, boosting the female gender’s bargaining power within households and hold over resources.

"PMMY does not just create micro-entrepreneurs; it seeds a broader ecosystem of empowered, economically active women whose participation drives inclusive and sustainable development,” Sinha said.

Launched in 2015, PMMY is a government-backed scheme that provides small loans (up to Rs 10 lakh) to micro and small enterprises.

The scheme categorises loans into Shishu (up to Rs 50,000), Kishore (Rs 50,001 to Rs 5 lakh), and Tarun (Rs 5,00,001 to Rs 10 lakh).

Data shows women account for nearly 68 per cent of all Mudra beneficiaries PMMY.

The CAGR of per-woman loan disbursal under PMMY stands at 13 per cent between FY16 and FY25, reaching Rs 62,679. At the same time incremental savings (deposits) by women grew at a CAGR of 14 per cent. This signals not just credit uptake but improved financial behaviour, Sinha said.

In light of these outcomes, the expert suggested PMMY to now focus on enabling the next stage of growth which includes supporting eligible women borrowers to move from smaller loans (Shishu/Kishor) to higher-value Tarun loans, encouraging business expansion and formalisation.

He also urged tracking gender-disaggregated outcomes through a real-time dashboard, incentivise states with strong women-led MSME ecosystems.