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Asian Journal of Research in Banking and Finance
Year : 2018, Volume : 8, Issue : 2
First page : ( 13) Last page : ( 27)
Online ISSN : 2249-7323.
Article DOI : 10.5958/2249-7323.2018.00009.3

Contribution of Financial Institutions to the Success of Pradhan Mantri Mudra Yojana (PMMY): An Empirical Investigation

Dr. Pattnaik Pradeep Kumar1, Chati Sarat Kumar2, Panda Bibekananda3

1General Manager & Principal, State Bank Staff College, Hyderabad, India. pradeep.pattnaik@sbi.co.in

2Chief Manager (Research), State Bank of India, State Bank Staff College, Hyderabad, India. s.chati@sbi.co.in

3Chief Manager (Economist), State Bank of India, State Bank Staff College, Hyderabad, India. bibekananda.panda1@sbi.co.in

Online published on 16 February, 2018.


MSME sector is one of the vital organs of the Indian economy being the source of direct employment to more than 40 per cent of the working population. Despite its commendable contribution to the economy, the sector struggles in getting adequate and timely access to credit from formal sources. Mudra scheme is based on the vision of formalizing the informal and thereby funding the unfunded. The primary research study has been designed to investigate the current market position and performances of different financial entities in the Mudra loan segment.364 officials from banks and non-baking entities those are into Mudra loan business have been interviewed. By using Ordinary Least Square (OLS) technique, it has concluded that KYC and other business related documents are the contentious issues in extending easy credit to Mudra loan borrowers. The study has identified some of the strengths of the Banks as well as NBFCs/MFIs in Mudra loan market space which include; identification of genuine borrowers, simplified process in appraisal and documentation, better recovery mechanism and focused approach etc.



Indian Banks, MSME, Mudra, Financial Inclusion, MFIs, PMMY.


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