These aren’t isolated stories; they are part of a quiet economic revolution enabled by PMMY. SKOCH group has been tracking these stories ever since PMMY was launched on 8 April 2015. The scheme reflects a fundamental shift in India’s development finance: from credit rationing to credit inclusion. Rooted in the vision of “Funding the Unfunded,” PMMY has, in its first decade, sanctioned over ₹33.65 lakh crore through 52.37 crore loans, most going to first-time borrowers, women and members of SC/ST/OBC communities. Ten years on, the transformative power of PMMY is not just in the numbers, but in the lives, it has changed, one enterprise, one dream, one woman at a time.

Since its inception in 2015, MUDRA Yojana has emerged as India’s most expansive credit-linked employment initiative and SKOCH has played a pivotal role in both validating and shaping its impact narrative. Many have claimed that India was going through a ‘jobless growth’. It was only SKOCH which identified how entrepreneurship is often ignored and how Prime Minister has brought in a revolution by empowering the lowest strata of the society by providing the agency to do more.

SKOCH’s 2017 report filled a critical policy void by empirically documenting that 5.44 crore jobs—including 1.68 crore incremental jobs—were created through MUDRA loans. This effort corrected a long-standing blind spot in India’s employment data, which often excluded self-employment due to over-reliance on ILO’s formal job definitions. Instead, SKOCH redefined a “job” as a gainful vocation that generates income and services credit. By applying category-specific employment multipliers and conducting field surveys across five major public sector banks and community-based organisations, SKOCH demonstrated that Shishu loans alone (loans < ₹50,000) generated over 3 crore direct jobs, with strong inclusion of women (70%) and SC/ST/OBCs (48%). The report had concluded that no scheme since independence has been able to benefit so many individuals so fast.

This report was acknowledged by Prime Minister Modi who tweeted it too. Additionally, it was referenced to answer parliamentary questions.

In 2018, SKOCH further deepened the discourse with its second landmark report, highlighting that job creation had tripled to 6.8 crore within just two years, proving the scheme’s momentum and sustainability. The employment elasticity of microcredit, long underestimated in formal economic models, was brought into focus as SKOCH tracked that NBFCs, MFIs and PSBs had created scalable employment across geographies, especially non-tier districts which absorbed over 70% of Shishu loans. SKOCH challenged the conventional binary of “jobless growth” versus “formal jobs” by aligning MUDRA’s impact with the New Structural Economics), which argues for financing informal enterprises as a path to structural transformation. It further advocated complementary policy moves: shifting from MUDRA debit cards to MUDRA credit cards, incentivising Tier-2 and rural lending through tax breaks and improving working capital access—connecting it with PMJDY for account portability and Digital India for credit monitoring. The report also noted that the NPA ratio of 6.2% under PMMY remained far healthier than overall banking sector averages, debunking fears of unsustainable lending.

By 2024, SKOCH’s longitudinal analysis in The Paradigm Shifts firmly established PMMY as the largest employment-generative intervention in India’s post-liberalisation history. It found that MUDRA created 2.52 crore steady jobs annually, totaling 25.2 crore credit-linked employments over a decade—outperforming traditional employment schemes in cost-efficiency and scale. SKOCH argued that access to microcredit transforms informal economic potential into productive capital, especially when layered with complementary schemes like PMAY (which increases household assets) and Skill India. By integrating financial deepening with asset creation and digital identity (via Aadhaar), MUDRA formed the bedrock of an ecosystem where small credit catalysed both economic agency and job formalisation over time. Through 80+ field case studies across Bihar, UP, Odisha and West Bengal, SKOCH showcased how repeat borrowers expanded enterprises, multiplied employment and exited subsistence into sustained economic mobility.

A key insight from the report is that a credit of just ₹85,000 is sufficient to create one job, a notable decline from ₹90,000 in 2017, indicating improving capital efficiency in employment generation. Moreover, the field research revealed that borrowers often take repeat loans and as many as six tranches over time, indicating that the initial credit infusion is not a one-off intervention but rather a catalyst for long-term business growth and job creation. In a sample of 80 documented cases, the average direct employment per borrower across multiple loans was an astonishing 6.6 jobs. This robust multiplier effect—despite being conservatively pegged at 0.66 jobs per new account in the report—demonstrates how microcredit, when targeted well, can outperform traditional job schemes in generating meaningful livelihoods.

This was the second report in the series, released during the peak of last general elections, settled the debate on job growth once again. Prime Minister Modi once again acknowledged the findings of the report, mentioning on the national media a few times.

Beyond its direct employment impact, PMMY plays a critical role in addressing structural inequalities in credit access. India’s credit gap, which once plagued over 250 districts in 2005, has been significantly narrowed—with only 28 districts now facing a severe credit outreach gap of over 95%. The SKOCH study finds a strong correlation between credit access and multidimensional poverty reduction, NSDP growth and even non-economic outcomes such as women’s education and access to clean energy. PMMY, by formalising credit flows to micro-entrepreneurs and first-time borrowers, serves as both a financial deepening initiative and a social mobility instrument. Crucially, it breaks the myth that small loans are economically inconsequential. In fact, by aggregating these “small wins” at the national level, PMMY has proven that incremental and fractional employment, when backed by sound credit delivery and repeat engagements, can produce large-scale structural transformation in the Indian labour market.

The focus on social inclusion is deliberate—over 50% of beneficiaries are from SC/ST/OBC groups—making PMMY a textbook case of affirmative public policy design that operationalises the mantra of “Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayaas.”

The scheme’s macroeconomic significance lies in its role in broadening the base of productive credit. While traditional bank lending disproportionately favours larger, creditworthy enterprises, PMMY has redirected the financial system towards a demand-driven model. By backing loans with the Credit Guarantee Fund for Micro Units (CGFMU), the scheme has also addressed the issue of lender risk aversion, thereby crowding in private capital. This is critical, given that MSMEs serve as ancillary units to large industries and are essential for employment-intensive growth.

Critically, PMMY’s counter-cyclical role during the COVID-19 pandemic underscores its institutional resilience. The 2% interest subvention under the Aatma Nirbhar Bharat Abhiyan and the continued disbursement of loans during 2020–21 helped cushion the informal economy at a time when global supply chains were collapsing. The Tarun Plus category, introduced in 2024, is a natural progression in this continuum—enabling previously successful entrepreneurs to scale up, thereby creating second-order employment effects.

As India marches toward its goal of becoming a developed economy by 2047, PMMY stands as a pillar of its inclusive development strategy. It is not merely a loan scheme—it is a reimagination of economic citizenship. Its tenth anniversary is a reaffirmation of the state’s role in enabling equitable growth through financial empowerment.