Impact of Pradhan Mantri Mudra Yojana on Startup Development: An Analytical Study in the Nagpur Region

Abstract

Startup development and entrepreneurship are significant in enhancing economic growth and job creation as well as financial inclusion. The Government of India initiated the Pradhan Mantri Mudra Yojana (PMMY) to offer credit without collateral to the small and micro enterprises to promote the setting up and growth of the small businesses. This paper focuses on the Pradhan Mantri Mudra Yojana to Nagpur and its effects on the development of startups. This study uses a descriptive and analytical design and is developed on the primary and secondary data. A structured questionnaire was used to get primary data out of 120 Mudra loan beneficiaries in the form of a structured questionnaire using convenience sampling. The results show that PMMY has played a major role in the formation of startups, most of them in the retail and service industry, and has fostered self-employment and the development of small scale employment. The research also shows that Mudra loans have been helpful in enhancing the financial performance and the income of various entrepreneurs. Nevertheless, the issues that remain problematic include the absence of awareness, poor financial literacy and operational issues that influence the successful use of the scheme. The paper finds that PMMY is a significant policy initiative that facilitates grassroot entrepreneurship and startup growth, and additional institutional reinforcement and awareness campaigns can be used to improve its output.