Empowering women through collateral-free credit: An analysis of Pradhan Mantri Mudra Yojana's role in financial inclusion and gender-equitable growth

The Pradhan Mantri Mudra Yojana (PMMY), launched in April 2015, is one of India's most significant initiatives for promoting financial inclusion and micro-entrepreneurship through collateral-free loans up to ₹10 lakh. the Pradhan Mantri Mudra Yojana (PMMY) provides collateral-free loans up to ₹10 lakh to promote micro-entrepreneurship and financial inclusion. Women form the largest beneficiary group (68-71% of accounts), with over 35-37 crore women benefiting from cumulative sanctions exceeding 53.85 crore loans worth ₹35.13+ lakh crore (as of mid-2025). Using secondary data from MUDRA, PIB, NITI Aayog, DFS, and recent studies (2024-2026), the paper analyses trends, sectoral use, empowerment impacts, challenges, and policy suggestions. Women mainly invest in retail, food processing, beauty/tailoring/handicrafts, and small manufacturing mostly in rural/semi-urban areas and among SC/ST/OBC groups. Positive outcomes include 20-50% income rise, job creation, reduced moneylender dependence, better savings, stronger household decision-making, and improved social status. Challenges remain: smaller loans (mostly Shishu category), limited upgrade to Kishore/Tarun, skill/market gaps, and regional differences. Recommendations focus on graduation incentives, skilling integration, mentorship, gender-sensitive practices, and convergence with schemes like Stand-Up India and Lakhpati Didi. The scheme powerfully supports Atmanirbhar Bharat, Viksit Bharat@2047, and SDGs 5 & 8 for inclusive gender-equitable growth.