Pradhan Mantri Mudra Yojana (PMMY), launched on April 8, 2015, completes 11 years in 2026. It provides collateral-free loans up to ₹20 lakh to non-corporate, non-farm micro and small enterprises through three tiers: Shishu (up to ₹50,000), Kishore (₹50,001–₹5 lakh), and Tarun (₹5–₹10 lakh). A new Tarun Plus category (₹10–₹20 lakh) was added in Budget 2024. Cumulative sanctions exceed ₹33 lakh crore across over 52 crore loan accounts since inception.

PMMY addresses a structural gap in Indian credit markets: the near-total exclusion of micro-entrepreneurs — street vendors, artisans, small traders, women self-help groups — from formal banking. Before 2015, these borrowers relied on informal moneylenders charging usurious rates. MUDRA (Micro Units Development and Refinance Agency) was created as the refinancing backbone; it refinances banks, MFIs, NBFCs, and RRBs that disburse on-ground loans.

The three-tier architecture mirrors enterprise lifecycle: Shishu targets startups and subsistence entrepreneurs; Kishore targets those seeking to expand; Tarun targets established micro-businesses needing growth capital. The 2024 Budget's Tarun Plus (₹10–₹20 lakh) explicitly rewards good repayment track records, nudging credit discipline.

From a GS3 perspective, PMMY intersects multiple themes: financial inclusion, employment generation, women's economic empowerment (roughly 68% of beneficiaries are women), and formalisation of the informal economy. Critics flag asset quality concerns — MUDRA NPAs have been a subject of Parliamentary scrutiny — and question whether low-ticket loans genuinely create sustainable enterprises versus debt traps for the vulnerable. The scheme also plugs into JAM (Jan Dhan-Aadhaar-Mobile) infrastructure, making it a case study in leveraging digital public infrastructure for credit delivery. For UPSC GS3, the analytical angle is: inclusive credit architecture vs. NPA risk vs. livelihood outcomes.