Union Finance Minister Nirmala Sitharaman has asked banks involved in the Pradhan Mantri MUDRA Yojana (PMMY) to expand financial literacy efforts across states. The objective is to help small entrepreneurs understand financial services better, use credit effectively and expand their businesses.
During an interaction with PM MUDRA beneficiaries on Thursday, Sitharaman highlighted the importance of financial awareness for entrepreneurs. Her remarks followed a suggestion from an entrepreneur from Nagaland, who spoke about the need to improve financial literacy among small businesses. She said her network was working across more than 10 districts to help people understand financial services and access credit.
According to the interaction, banks providing MUDRA loans should also undertake financial literacy activities across states.
Timely Repayment Can Help Build Credit History
Sitharaman also explained how regular repayment of MUDRA loans can help entrepreneurs establish a credit record. A stronger credit history can gradually improve access to larger loans and regular banking services.
The minister pointed out that PM MUDRA was designed to provide collateral-free institutional credit to eligible small businesses. The scheme currently provides loans of up to Rs 20 lakh for income-generating activities in manufacturing, trading, services and allied agricultural activities.
She also recalled the role of the Pradhan Mantri Jan Dhan Yojana, launched in 2014, in expanding access to formal banking services. PM MUDRA was launched in 2015 with a focus on providing credit support to small entrepreneurs.
Beneficiaries Share Business Growth Stories
Several entrepreneurs shared their experiences during the interaction and explained how MUDRA loans had helped them establish or expand their businesses.
An entrepreneur from Karnataka said his loan had increased from Rs 1 lakh to Rs 5 lakh as his business grew. He currently employs three people and plans to set up a larger factory.
A printing business owner from West Bengal said she rebuilt her business after facing losses during the pandemic. She now employs eight people and is seeking finance to purchase a digital machine to expand her operations.
PM MUDRA Continues to Support Small Businesses
The experiences shared by beneficiaries highlighted the role of formal credit and disciplined repayment in supporting business expansion, Sitharaman said.
The PM MUDRA scheme has continued to expand its reach. According to the Finance Ministry, 59.14 crore loans amounting to Rs 41.71 lakh crore had been sanctioned under PMMY as of June 26, 2026. The scheme provides collateral-free institutional finance to micro and small business units.
The government has also structured MUDRA loans into four categories—Shishu, Kishor, Tarun and Tarun Plus—based on the stage of business growth and financing requirements.