PROJECT REPORT ON MUDRA LOAN

A
Study On
Awareness Toward Pradhan Mantri Mudra Yojana (PMMY) In Distt. Kangra (H.P.)
SUBIMITED IN
PARTIAL FULFILMENT FOR REQUIRMENT OF THE DGREE OF
MATER OF BUSINESS ADMINISTRATION
Submitted To: - Submitted By:-
HIMACHAL PRADESH TECHNICAL UNIVERSITY RAJAT SHARMA
HAMIRPUR 17MBA0464
HIMACHAL PRADESH TECHNICAL UNIVERSITY HAMIRPUR

CERTIFICATE
This is to certify that the major project report entitled,“ A study on awareness toward Pradhan Mantri
Mudra Yojana (PMMY) in Distt. Kangra(H.P.) ” has been carried out by Rajat Sharma S/O Sh. Desh
Raj having examination Roll No. 17MBA0464, bonafide student of Master of Business Administration, 4th
Semester, Department of Master of Business Administration, Gautam Institute of Management And
Technology, Hamirpur.
This major project report is a record of his work accomplished during 4th Semester of Master of Business
Administration, as a partial fulfilment of the requirement of the Degree of MBA for the successful
completion of the 4th semester, under my guidance.
I wish happiness and success in his endeavour.
Date: ………… Miss………………..
Place: Hamirpur

PREFACE
M.B.A. is the 4nd
step of management carrier. In order to achieve practical positive and concrete result, the
classroom learning need to be effectively linked to realities of the situation existing outside the classroom
this is particularly true to management.
To develop the healthy managerial and administrative skills in the potential manager it is necessary that
theatrical know must be supplemented with exposure to the real environment it is an undertaking project
research study that measuring of management itself is realized.
It was a great pleasure to get the opportunity for project work on advertisement getting chance to learn about
the making under the supervision of management faculty of our institute. Working on the project was in itself
a great experience.
In the coming pages an attempt has been made present repair covering the different aspect of the project
undertaken.

DECLARATION
I hereby Mr.Rajat Sharma University Roll No. 17MBA0464 declare that I have done the project report on
“A study on awareness toward Pradhan Mantri Mudra Yojana (PMMY) in Distt. Kangra (H.P.)”
which is submitted in partial fulfilment of the requirement for the degree of master of business
administration.
The data presented in the report is ture. The assistance and help that received during the course of this
investigation has been duly acknowledged. It is further declared that it has an original piece of work and it is
worthy of the consideration for the degree of MBA.
Date………………
Place: ……………… Rajat Sharma

ACKNOWLEDGEMENT
At this point, I would like to place a record my deep sincere sense of gratitude to those entire esteemed
person who’s direct and indirect co-operation and efforts have led to the completion of this report.
It is my proud on record my sincere thanks to my esteemed advisor; Miss. ………………. for his continuous
keen interest and providing me expert guidance; invaluable suggestion as well as constructive criticism and
inspiration from the inception to the completion of this study, without it would not have been successfully
completed.
I would also like to thank all the respondents who honestly answered the question asked to them.
Date: …………………. Thanking you
Place: ………………… Rajat Sharma

List Of Contents
S.No. Chapter Content
Page
No.
1 Chapter 1 Introduction of PMMY 1 –23
Micro financing meaning 3
Mission ,Vision , Purpose 3
Role & Monitoring of MUDRA 3—4
Management of PMMY 4—6
Product & Services of PMMY 6 – 13
Purpose of MUDRA Loan 13—14
Financial Institutions Shortlisted To Be Partner In MUDRA
Yojana 15—22
Report Card of Mudra 22—23
2 Chapter 2
Review Of Literature
24 – 26
3 Chapter 3 Research Methodology 27- 30
Need of Study 28
Scope of Study 28
Objective of Study 28
Research Design 28
Sampling Design 29
Data Collection 29
Analysis Tool 29
Limitations of Study 29 -30
4 Chapter 4 Data Interpretation & Analysis 31 – 56
5 Chapter 5 Findings , Suggestions & Conclusion 57 – 59
References & Websites
Annexure

List Of Tables & figures
Table &
figure
no. Particular
Page
No.
4.1 Classification of respondents on the basis of Gender factor 33
4.2 Classification of respondents on the basis of their age factor 34
4.3 Classification of respondents on the basis of their qualification 35
4.4 Classification of respondents on the basis of their occupation 36
4.5 Classification of respondents on the basis of their Income group 37
4.6 Classification of respondents on the basis of their awareness toward PMMY 38
4.7
Classification of respondents on the basis of their awareness toward lunching year of
PMMY 39
4.8 Classification of respondents on the basis how did you know toward PMMY 40
4.9
Classification of respondents on the basis of their awareness toward main objective of
PMMY 41
4.1
Classification of respondents on the basis of their awareness toward main objective of
PMMY 42
4.11
Classification of respondents on the basis of their awareness toward maximum loan
limit under PMMY 43
4.12
Classification of respondents on the basis of their awareness toward maximum loan
limit under PMMY 44
4.13
Classification of respondents on the basis of their awareness toward loan categories
under this scheme 45
4.14
Classification of respondents on the basis of their awareness toward service provider
under PMMY 46
4.15
Classification of respondents on the basis of their awareness toward service provider
under PMMY 47
4.16 Classification of respondents on the basis of their response 48
4.17
Classification of respondents on the basis of their awareness toward process of loan
taking under PMMY 49
4.18
Classification of respondents on the basis of their awareness toward process of loan
taking under PMMY 50
4.22
Classification of respondents on the basis of their awareness toward how much loan
given in HP PMMY 54
4.23
Classification of respondents on the basis of their awareness toward how much loan
given in HP PMMY 55
4.25
Classification of respondents on the basis of their thinking to extend the pace
regarding awareness 57

References & Websites:-
References
 Kothari. C.R (2004) Research Methodology-Method and technique. Willy eastern ltd.
 Y. Sharma, “Women entrepreneur in India”, IOSR Journal of Business Management,15(2),2013
 N. Bosma, M. V. Praag, R. Thurik and G.D. Wit, “The value of human and social capital
investment for the business performance of start ups”, 2002
 Gupta C.B. 2004 Entrepreneurship Development in India. Sultan Chand & sons New Delhi.pp.1.17.
 ASSOCHAM INDIA , SMERA Rating LTD. (2015). Small Business Financing through MUDRA.
 The Economics Times Newspaper article (2016), Impact of MUDRA on Micro Industry .
 Archana Soni , 9, September 2016 international Journal of Economic and Business Review.
Websites:-
 www. mudra.org. in
 www. sidbi.in
 www. moneycontrol.com

Annexure
Questionnaire on awareness about Pradhan Mantri Mudra Yojana (PMMY).
Dear Respondent,
I am Rajat Sharma, Pursuing MBA from HIMACHAL PARDESH TECHNICAL UNIVERSITY HAMIRPUR.
I request to spend 5 minutes in filling this questionnaire to help complete my Project about awareness on
Pradhan Mantri Mudra Yojana (PMMY). The information is use only academic purpose.
Section - A
1. Name …………………
2. Gender :
a) Male b) Female
3. Age :
a) Below 20 Years b) 20 – 40 Years
c) 40 – 50 Years d) Above 50 Years
4. Education Qualification
a) Matriculation
b) 10+2
c) Graduation
d) Post Graduation
e) Any Other
5. Occupation
a) Government employee
b) Professional
c) Business
d) Student
e) Agriculture
6. Annual income
a) Below Rs. 100000

b) Rs. 100000 – Rs. 300000
c) Rs.300000 – Rs. 500000
d) Above Rs. 500000
Section - B
7. Are you aware about Pradhan Mantri MUDRA Yojana (PMMY)?
a) Yes b) No
7(A) if yes then tells me which year Pradhan Mantri MUDRA Yojana (PMMY) was launch?
a) 2014 d) 2015
b) 2016 e) 2013
c) 2017 f) 2018
8. How did you come to know about Pradhan Mantri MUDRA Yojana (PMMY)?
a) Friends & Relatives
b) Advertisement or Media
c) Bank or financial Institution
d) Any Other (Please Specify)……………………
9. Did you know about a main objective of Pradhan Mantri MUDRA Yojana (PMMY)?
a) Yes b) No
9. (A) If yes, then tell me what is the main objective of Pradhan Mantri MUDRA Yojana (PMMY)?
a) Development of micro enterprise sector
b) Refinance support
c) Purchase of equipment & new technology
d) Any Other (Please Specify)……………………
10. Did you know the maximum limit of loan under this Scheme?
a) Yes b) No
10. (A) If yes, then tell me what is the maximum limit of loan under the Pradhan Mantri MUDRA
Yojana (PMMY)?

a) Below Rs.300000
b) Rs.600000
c) Rs.800000
d) Rs.1000000
e) Above Rs.2000000
11. Did you know about Categories of funding of loan in this scheme?
a) Yes b) No
12. Did you know about Financial Institutions Shortlisted to Be Service provider in MUDRA Yojana for
funding?
a) Yes b) No
12(A) If yes, then tell me which financial institution is not a service provider of this scheme?
a) Aditya Birla Finance Ltd. e)HDFC Bank Ltd.
b) State Bank of India f) ICICI Bank Ltd.
c) Punjab National Bank g) India Infoline Finance Ltd (IIFL)
d) Axis Bank Ltd. h) Kccb Bank Ltd.
i) If any other (Please Specify)…………………………
13. Pradhan Mantri MUDRA Yojana (PMMY) is beneficial for Micro industry of country give your
response on the rating scale?
a) Strongly agree b) Agree c) Neutral d) Disagree e) Strongly disagree
14. Did you know about the process of taking loan under this scheme?
a) Yes b) No
14(A) If yes, then rate the process of taking loan in PMMY?
a) Vary easy b) Easy c) Neutral d) Complex e) Very Complex
15. PMMY has helped to reduce the dependency on informal financial institution (like money lenders)?
a) Strongly agree b) Agree c) Neutral d) Disagree e) Strongly Disagree

16. PMMY is capable to provide employment in country?
17. PMMY is an effective policy to measure or solve the financial problems of Micro industry of India?
18. Did you know about how much loan give to the Micro industry in Himachal Pradesh under this scheme
in 2018 to 2019?
a) Yes b) No
18 (A) if yes, then tell me what is the amount of loan which given in 2018 & 2019 in Himachal Pradesh?
A. 1669.20
B. 1829.79
C. 1779.78
D. 1659.78
19. PMMY is helpful in improving the country economic growth?
20. There is need up pace the extant of awareness about this scheme?
A) Yes B) No
If any suggestion (Please specify) ……………………………………………

2
Introduction
Pradhan Mantri Mudra Yojana (PMMY):-
Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India to “fund the
unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to
them. It enables a small borrower to borrow from all Public Sector Banks such as PSU Banks, Regional
Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions
(MFI) and Non Banking Finance Companies (NBFC) for loans up to Rs 10 lakhs for non-farm income
generating activities. The scheme was launched on 8th April, 2015 by the Hon'ble Prime Minister.
Micro Units Development and Refinance Agency (MUDRA):-
Micro Units Development and Refinance Agency Bank (or 'MUDRA Bank) is a public sector financial
institution in India. It provides loans at low rates to micro-finance institutions and non-banking financial
institutions which then provide credit to MSMEs. It was launched by Prime Minister Narendra Modi on 8
April 2015.
The formation of the agency was initially announced in the 2015 Union budget of India in February
2015. It was formally launched on 8 April.
The MUDRA banks were set up under the Pradhan Mantri MUDRA Yojana scheme. It will provide its
services to small entrepreneurs outside the service area of regular banks, by using last mile agents. About
5.77 crore (57.6 million) small business have been identified as target clients using the NSSO survey of
2013. Only 4% of these businesses get finance from regular banks. The bank will also ensure that its
clients do not fall into indebtedness and will lend responsibly.
The bank will have an initial capital of ₹ 200 billion (US$2.8 billion) and a credit guarantee fund of ₹ 30
billion (US$420 million). The bank will initially function as a non-banking financial company and a
subsidiary of the Small Industries Development Bank of India (SIDBI). Later, it will be made into a
separate company. However, it will regulate Microfinance institutions.

3
Micro financing:-
Microfinance is a category of financial services targeted at individuals and small businesses that lack
access to conventional banking and related services. Microfinance includes microcredit, the provision of
small loans to poor clients savings and checking accounts micro insurance and payment systems.
MUDRA Vision:-
To be an integrated financial and support services provider par excellence benchmarked with global best
practices and standards for the bottom of the pyramid universe for their comprehensive economic and
social development.
MUDRA Mission:-
To create an inclusive, sustainable and value based entrepreneurial culture, in collaboration with our
partner institutions in achieving economic success and financial security.
MUDRA Purpose:-
Our basic purpose is to attain development in an inclusive and sustainable manner by supporting and
promoting partner institutions and creating an ecosystem of growth for micro enterprises sector.
Origin of Mudra Scheme:-
The Union Budget presented by the Hon'ble Finance Minister Shri Arun Jaitley, for FY 2015-16,
announced the formation of MUDRA Bank. Accordingly MUDRA was registered as a Company in
March 2015 under the Companies Act 2013 and as a Non Banking Finance Institution with the RBI on 07
April 2015. MUDRA was launched by the Hon’ble Prime Minister Shri Narendra Modi on 08 April 2015
at a function held at Vigyan Bhawan, New Delhi.
Roles and Responsibilities of MUDRA:-
MUDRA has been formed with primary objective of developing the micro enterprise sector in the
country by extending various supports including financial support in the form of refinance, so as to
achieve the goal of funding the unfunded. The GOI Press release of 2 March 2015 has laid down the roles
and responsibilities of MUDRA.
Subsequently GOI has also decided that MUDRA will provide refinance support, monitor the PMMY
data by managing the web portal, facilitate offering guarantees for loans granted under PMMY and take
up other activities assigned to it from time to time. Accordingly MUDRA has been carrying out these
functions over the last one year.

4
Monitoring of Pradhan Mantri Mudra Yojana (PMMY):-
Pradhan Mantri Mudra Yojana (PMMY) was launched along with the launching of MUDRA on 08 April
2015 and the detailed guidelines were issued by Government of India to all banks and MFIs. MUDRA
was given the responsibility of monitoring the programmed by collecting the information on regular
basis. Accordingly, MUDRA has put in place a monitoring portal which captures the data on lending
under PMMY, in a granular fashion.
Management of MUDRA:-
Shri Mohammad Mustafa – IAS
Shri Mohammad Mustafa, IAS, assumed charge as Chairman & Managing
Director of Small Industries Development Bank of India and as Chairman
of MUDRA Ltd. w.e.f. August 28, 2017.
An IAS officer of Uttar Pradesh cadre, Shri Mustafa, prior to joining
SIDBI, served as Joint Secretary, Department of Financial Services (DFS), Ministry of Finance, and
Government of India. He brings with him more than two decades of experience in Government Service
across general administration, rural developmental initiatives, monetary economics, public finance,
policy making, infrastructure development and international trade.
During his tenure at DFS, he was instrumental in implementing several paths breaking initiatives viz.,
formulation of “Indradhanush”, a policy to revamp public sector banks amidst rising NPAs and for
capital infusion in banks. He served as CMD of National Housing Bank between 2014-15. He also served
as MD of CERSAI in 2016 and launched movables registry. He also served as nominee director on the
boards of Andhra Bank, Union Bank of India, Bank of Baroda and New India Assurance Company.
Shri Pankaj Jain – IAS
Pankaj Jain is an IAS officer of the 1990 batch, currently the Joint Secretary,
Department of Financial Services, Ministry of Finance, Government of India. He is
an alumnus of Shri Ram College of Commerce from where he has a Bachelor’s
degree in Commerce followed by an MBA from FMS Delhi. He is also associate of
the Institute of Cost Accountants of India.
He has worked for the Governments of Assam and Meghalaya. This encompasses being District
Magistrate at Shillong and Tura along with assignments in the Secretariat and State Corporations dealing
with Power, Planning, Information Technology, Livelihood Promotion and Industries as well as being
Director with the Government of India in the Ministry of Micro, Small and Medium Enterprises. His
work experience also includes a three-year stint with the British International Aid Agency - the
Department for International Development (DFID) as Governance Adviser and Senior Program Manager.

5
Ms. Jyotsna Sitling – IFS
Ms. Jyotsana Sitling is an officer from Indian Forest Service, currently
holding the post of Joint Secretary, Ministry of Skill Development &
Entrepreneurship (MSDE), Govt. of India. Ms Silting joined the service in
1987 and is from Uttarakhand cadre.
She belongs to Lepcha Tribal Community and hails from Kalimpong, West Bengal. She has experience
of working in the Rural Development Department, looking after the rural livelihood activities. She is
having background and experience of handling various Departments of GoI/State Govt. over the last 27
years.
Shri Pillarisetti Satish
Shri Satish has 33 years of experience in the financial sector, with RBI, NABARD
and microfinance sector, before joining Sa-Dhan as its Executive Director in
March, 2015. Sa-Dhan is an all-India Association of community development
finance institutions, including all MFIs.
Shri Satish was earlier the Chief General Manager heading the Micro Credit Innovations Department of
the National Bank for Agriculture and Rural Development (NABARD). Prior to this, he headed its
Maharashtra Regional Office at Pune. He also worked as a Faculty Member at Bankers’ Institute of Rural
Development (BIRD), Lucknow
Shri Arvind Kumar Jain
Mr. A.K Jain, Ex-ED Punjab & Sind Bank is having Banking experience of
around 40 years with expertise in Treasury & Credit.
He joined Oriental Bank of Commerce in 1977 and attained the position of Chief
General Manager in OBC. Thereafter in December 2015 he was appointed by the
Government of India as an Executive Director of Punjab & Sind Bank, where he worked till January
2017.
Shri Aalok Gupta
Shri Aalok Gupta joined MUDRA in August 2018. He is a career banker and
has previously worked with Bank of America, HDFC Bank and HSBC. His
last assignment was with Yes Bank, where he was a member of the startup
team which built the Retail business.
Shri Aalok graduated from the Indian Institute of Management, Ahmadabad, after studying at Delhi
College of Engineering.

6
Smt.Rajni Sood
Smt. Sood is a post graduate in Economics. She is also a member of Indian Institute
of Banking. She holds a Certificate in Commercial Practice. She has over 35 years of
experience in development banking including IDBI and SIDBI.
Product / Services of MUDRA:-
Micro Units Development and Refinance Agency Ltd. [MUDRA] is an NBFC supporting development
of micro enterprise sector in the country. MUDRA provides refinance support to Banks / MFIs for
lending to micro units having loan requirement up to 10 lakh. MUDRA provides refinance to micro
business under the Scheme of Pradhan Mantri MUDRA Yojana. The other products are for development
support to the sector. The bouquet of offerings of MUDRA is depicted below. The offerings are being
targeted across the spectrum of beneficiary segments.
Pradhan Mantri MUDRA Yojana (PMMY):-
Under the aegis of Pradhan Mantri Mudra Yojana (PMMY), MUDRA has created products / schemes.
The interventions have been named 'Shishu', 'Kishor' and 'Tarun' to signify the stage of growth /
development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference
point for the next phase of graduation / growth to look forward to :
Shishu: covering loans up to 50,000/-
Kishor: covering loans above 50,000/- and up to 5 lakh
Tarun: covering loans above 5 lakh and up to 10 lakh

7
It would be ensured that more focus is given to Shishu Category Units and then Kishor and Tarun
Categories.
Within the framework and overall objective of development and growth of micro enterprises sector under
Shishu, Kishor and Tarun, the products being offered by MUDRA are so designed, to meet requirements
of different sectors / business activities as well as business / entrepreneur segments.
The funding support from MUDRA is of four types:-
 Micro Credit Scheme (MCS) for loans up to 1 lakh finance through MFIs.
 Refinance Scheme for Commercial Banks / Regional Rural Banks (RRBs)
 Women Enterprise program
 Securitization of loan portfolio
Micro Credit Scheme:-
Micro Credit Scheme is offered mainly through Micro Finance Institutions (MFIs), which deliver the
credit up to Rs.1 lakh, for various micro enterprise activities. Although, the mode of delivery may be
through groups like SHGs/JLGs, the loans are given to the individuals for specific income generating
micro enterprise activity. The MFIs for availing financial support need to enroll with MUDRA by
complying with some of the requirements as notified by MUDRA, from time to time.
Refinance Scheme for Banks:-
Different banks like Commercial Banks, Regional Rural Banks and Scheduled Cooperative Banks are eligible to
avail of refinance support from MUDRA for financing micro enterprise activities. The refinance is available for
term loan and working capital loans, up to an amount of 10 lakh per unit. The eligible banks, who have enrolled
with MUDRA by complying to the requirements as notified, can avail of refinance from MUDRA for the loan
issued under Shishu, Kishor and Tarun categories.
Women Enterprise Program:-
In order to encourage women entrepreneurs the financing banks / MFIs may consider extending additional
facilities, including interest reduction on their loan. At present, MUDRA extends a reduction of 25bps in its
interest rates to MFIs / NBFCs, who are providing loans to women entrepreneurs.

8
MUDRA Card:-
MUDRA Card is an innovative product which provides
working capital facility as a cash credit arrangement.
MUDRA Card is a debit card issued against the MUDRA
loan account, for working capital portion of the loan. The
borrower can make use of MUDRA Card in multiple
withdrawal and credit, so as to manage the working capital limit in a most efficient manner and keep the
interest burden minimum. MUDRA Card will also help in digitalization of MUDRA transactions and
creating credit history for the borrower.
National Payment Corporation of India (NPCI) has given RuPay branding to MUDRA Card and also
separate BIN / IIN for the same, by which credit history can be tracked.
MUDRA Card can be operated across the country for withdrawal of cash from any ATM / micro ATM
and also make payment through any ‘Point of Sale’ machines.
The design of the MUDRA card as approved by DFS, GoI and NPCI is given below. Banks can
customize the same by incorporating their logo and name.
Portfolio Credit Guarantee:-
Traditional financing in Indian context adopts an Asset Based lending approach with emphasis on
collaterals. Micro units, most of the times, are unable to provide the comfort of collaterals. Hence
MUDRA loans i.e. loans up to 10 lakh, have been made collateral free, as per the RBI norms in this
regard.
To mitigate the issue of collaterals, MUDRA is offering a Credit Guarantee Product. MUDRA Credit
Guarantee is extended by creation of a Fund called “Credit Guarantee Fund for Micro Units”
[CGFMU] and the scheme has been notified by GoI vide its notification dated April 18, 2016.
Accordingly, all eligible micro loans sanctioned since April 08, 2015 is covered under the Scheme. The
Scheme is being managed by National Credit Guarantee Trustee Company Ltd. [NCGTC], an agency
promoted by the GOI.
Further, given the context of the industry /segment, since the individual loan sizes would expectedly be
small and number of loans will be large, Mudra Credit Guarantee scheme provide a Portfolio Guarantee.
Under this, Credit Guarantee or Risk Sharing is provided for a portfolio of homogenous loans instead of a

9
Scheme for individual loan - by - loan guarantee. This is expected to create administrative efficiencies
and increase receptiveness for the Credit Guarantee product. The Guarantee product is one of the key
interventions proposed with the objective of bringing down the cost of funds for the end beneficiary to
improve its creditworthiness.
Creation of Resources for Credit Enhancement / Guarantee Facility:-
The corpus proposed for the Credit Guarantee Scheme would be regularly augmented with a charge on the
outstanding loans under refinance. The same would be utilized for providing first loss guarantee / credit
enhancement for securitized portfolio loans, as discussed below4.
Development and Promotional Support:-
Besides the credit constraints, the NCSBs face many non-credit challenges, like,
 Skill Development Gaps
 Knowledge Gaps
 Information Asymmetry
 Financial / Business Literacy
 Lack of growth orientation
To address these constraints, MUDRA will adopt a credit- plus approach and offer Developmental and
Support services to the target audience. It will act as a market maker and build –up an ecosystem with
capacities to deliver value in an efficient and sustainable manner.
Imparting Financial / Business Literacy:-
Financial / business literacy or financial education can broadly be defined as 'providing familiarity with
and understanding of financial market products, especially rewards and risks, in order to make informed
choices.'
Financial Inclusion and Financial / business Literacy are twin pillars. While Financial Inclusion acts from
supply side providing the financial market / services that people demand, Financial Literacy stimulates
the demand side – making people aware of what they can demand. Supporting the financial literacy drive
will contribute substantially from the demand side to the national agenda of financial inclusion.
 Skill Development Gaps
 Knowledge Gaps

10
 Information Asymmetry
 Financial / Business Literacy
 Lack of growth orientation
To address these constraints, MUDRA will adopt a credit- plus approach and offer Developmental and
Support services to the target audience. It will act as a market maker and build –up an ecosystem with
capacities to deliver value in an efficient and sustainable manner.
This apart, the micro enterprise segment also needs business literacy which will help them in acquiring knowledge
on running / managing business, keeping accounts, working out ratios, etc.
Promotion and Support of Grass Root Institutions:-
One of the major focus areas will be to formalize and institutionalize the last mile financiers / grass root
institutions so that a new category of financial institutions viz. Small Business Finance Companies can be
created and ecosystem developed for their growth.
Rural innovations at micro enterprise / unit level would also be one of the key areas for intervention and
support. Support to Micro units by way of the facility of incubators would be taken up. This would
ensure that at the most grass root levels in the country, there is climate for promotion of innovation as

11
well as incubation of ideas from educated rural youths which would germinate in viable micro
enterprises.
Creation of Framework for "Small Business Finance Entities":-
An enabling framework for support to "Small Business Finance Entities" would be created leading to
formalization of the economy which is presently included in the informal sector.
Synergies with “Make in India” Campaign:-
Government of India has initiated several steps for encouraging enterprise creation in our country. The
major one is “Make in India” movement. Make in India is a major national program designed to facilitate
investment, foster innovation, enhance skill development, project intellectual property and build best in
class manufacturing infrastructure. This coupled with Start-up India and Stand-up India campaign, has
created a conducive environment of enterprise creation in different scales. MUDRA, being an initiative
for promoting micro enterprises, fits well with Make in India initiative for supporting these micro
enterprises.
Synergies with National Rural Livelihoods Mission / National Urban Livelihood
Mission:-
The National Rural Livelihoods Mission [NRLM] is set up "To reduce poverty by enabling the poor households
to access gainful self-employment and skilled wage employment opportunities, resulting in appreciable
improvement in their livelihoods on a sustainable basis, through building strong grassroots institutions of the
poor." To achieve the above, NRLM Mission inter alia follows a demand driven strategy for continuous capacity
building, imparting requisite skills and creating linkages with livelihood opportunities for the poor, including those
emerging in the organized sector.
Similarly, the Deendayal Anthodia Yojana [DAY] National Urban Livelihood Mission is another progam which
is aimed at reducing urban poverty through creation of micro enterprises, individually and group mode.
MUDRA, being an initiative for promoting micro enterprises, would make all efforts to draw synergies between
NRLM, NULM and MUDRA interventions for supporting micro enterprises and creating sustainable livelihood
opportunities for the poor.
Synergies with National Skill Development Corporation:-
NSDC is already engaged in the process of skill development at a National scale. Synergizing with
NSDC will help MUDRA in augmenting the skill sets of the sect oral players.

12
Working with Credit Bureaus:-
With the growth of responsible lending practices, Credit Bureaus (CB) have gained increasing level of
acceptability in the micro finance sector. The CB culture will help in creating credit history over a period of time
which will facilitate faster credit dispensation as the system evolves.
Working with Rating Agencies:-
Accreditation / rating of MFI entities is one of the roles earmarked for MUDRA. Further, a segment of
financial intermediaries for the non corporate small business sector is envisaged to emerge in the
financing architecture. MUDRA would work in coordination with Rating Agencies so that appropriate
rating framework (s) which take into account sector specific features are devised for various sector
participants. In the longer run, availability of rating for sector participants would facilitate formalization
and further flow of capital to the sector.
The MUDRA Pricing:-
Access to finance is critical and equally critical is the cost of finance to the NCSB/ultimate beneficiary.
The funds mobilized by micro units from the informal sources are at a high cost. There is scope for cost
rationalization. However, the rationalization is intricately linked with the cost of funds for the last mile
MFIs.
GOI while announcing the formation of MUDRA also announced a refinance corpus for MUDRA at
20000 crores, to be allocated by RBI from the Priority Sector lending shortfall. Accordingly, RBI has
provided the allocation which helps in bringing down the cost of lending at the ultimate borrower level as
MUDRA refinance will reduce the average borrowing cost of the lending institutions
The NBFC-MFIs are presently regulated by Reserve Bank of India and RBI has already prescribed
detailed guidelines for margin cap in respect of MFIs. The margin cap has been pegged at 10% for MFIs
having loan portfolio of more than 100 crores and 12% for smaller MFIs having loan portfolio of less
than 100 crores or 2.75 times the average base rate of five major commercial banks, whichever is less. In
the backdrop of these guidelines and the fact that MFI sector has been constantly trying to reduce its
costs, MUDRA would also help MFIs reduce their cost to bring down the overall cost to the end
beneficiaries. Further, at the time of appraisal, MUDRA would be studying / assessing individual MFIs
on this as well as other related parameters and suitably price its assistance based on such assessment.

13
In the case of Banks, RBI has also put a cap on the interest rate at Base rate/ MCLR for lending micro
units by Commercial Banks by availing of MUDRA refinance. Similarly, the RRBs and Cooperatives
have been given a interest cap of 3.50% over and above MUDRA refinance rate, while lending to
MUDRA loan by availing of MUDRA refinance.
In case of NBFCs, RBI has also stipulated a interest cap of 6% over and above MUDRA refinance while
their lending to MUDRA segment.
All these are expected to have a positive impact on the pricing of MUDRA loans in the country whereby
the Micro enterprises will be able to avail of credit at a affordable interest rate. But, first and foremost
objective is to ensure accessibility of credit.
Purpose of MUDRA loan:-
Mudra loan is extended for a variety of purposes which provide income generation and employment creation. The
loans are extended mainly for :
 Business loan for Vendors, Traders, Shopkeepers and other Service Sector activities
 Working capital loan through MUDRA Cards
 Equipment Finance for Micro Units
 Transport Vehicle loans
Following is an illustrative list of the activities that can be covered under MUDRA
loans:-
Transport Vehicle:-
Purchase of transport vehicles for goods and personal transport such as auto rickshaw, small goods transport
vehicle, 3 wheelers, e-rickshaw, passenger cars, taxis, etc.
Community, Social & Personal Service Activities:-
Saloons, beauty parlors, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shop,
DTP and Photocopying Facilities, Medicine Shops, Courier Agents, etc.
Food Products Sector:-
Activities such as papad making, achaar making, jam / jelly making, agricultural produce preservation at rural
level, sweet shops, small service food stalls and day to day catering / canteen services

14
Textile Products Sector / Activity:-
Handloom, power loom, khadi activity, chikan work, zari and zardozi work, traditional embroidery and hand work,
traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and
other textile non garment products such as bags, vehicle accessories, furnishing accessories, etc.
Business loans for Traders and Shopkeepers:-
Financial support for on lending to individuals for running their shops / trading & business activities / service
enterprises and non-farm income generating activities with beneficiary loan size of up to 10 lakh per enterprise /
borrower.
Activities allied to agriculture:-
Activities allied to agriculture', e.g. pisciculture, bee keeping, poultry, livestock, rearing, grading, sorting,
aggregation agro industries, diary, fishery, agriclinics and agribusiness centers, food & agro-processing,
etc.(excluding crop loans, land improvement such as canal, irrigation and wells) and services supporting these,
which promote livelihood or are income generating shall be eligible for coverage under PMMY in 2016-17.
Financial Institutions Shortlisted To Be Partner In MUDRA Yojana:-
Non Banking Financial Institution:-
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956
engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities
issued by Government or local authority or other marketable securities of a like nature, leasing, hire-
purchase, insurance business, chit business but does not include any institution whose principal business
MUDRA Yojana
Banking InstitutionNon Banking financial
Company (NBFC)
Cooperative
Banks

15
is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or
providing any services and sale/purchase/construction of immovable property.
Name of partners NBFC:-
NBFC
1 Aditya Birla Finance Ltd NBFC
2 Ananya Finance for Inclusive Growth Pvt. Ltd. NBFC
3 ASA International India Microfinance Ltd NBFC
4 Bansal Credits Ltd. NBFC
5 Capital First Limited(CFL) NBFC
6 ECL Finance Ltd. NBFC
7 Electronica Finance Ltd. NBFC
8 Equitas Finance P. Ltd. NBFC
9 Esskay Auto Finance Ltd. NBFC
10 Five Star Business Credits Ltd. NBFC
11 Fullerton India Credit Co. Ltd. NBFC
12 IKF Finance Ltd. NBFC
13 India Infoline Finance Ltd (IIFL) NBFC
Cooperative Banks:-
Cooperative banking, as discussed here, includes retail banking carried out by credit unions, mutual
savings banks, building societies and cooperatives, as well as commercial banking services provided
by mutual organizations (such as cooperative federations) to cooperative businesses.
Name of Cooperative banks which partner in MUDRA Scheme :-
Cooperative Bank
1 Ahmedabad Mercantile Co-op Bank ltd Co-operative Banks
2 AP State Apex Co-op Bank Ltd. Co-operative Banks
3 Bassein Catholic Co-op Bank Co-operative Banks
4 Citizen Credit Co-op Bank Ltd Co-operative Banks
5 Dombivali Nagari Sahakari Bank Ltd Co-operative Banks

16
6 Gujarat State Co-op Bank Ltd Co-operative Banks
7 Jalgaon Janata Sahakari Bank Ltd Co-operative Banks
8 Kalupur Commercial Co-op Bank Co-operative Banks
9 Mehsana Urban Co-op Bank Co-operative Banks
10 Nutan Nagrik Sahakari Bank Ltd Co-operative Banks
11 Rajkot Nagarik Sahakari Bank Co-operative Banks
12 Saraswat Cooperative Bank Co-operative Banks
13 Surat People Co-op Bank ltd Co-operative Banks
14 Tamil Nadu Apex State Co-op Bank Ltd Co-operative Banks
15 TJSB Sahakari Bank Ltd Co-operative Banks
Banking Institution:-
Banking institution" means an institution that is incorporated under the laws of this State as a State bank,
trust company, or savings bank.
Name of the banks which partner in MUDRA Scheme:-
Public Sector Bank:-
Public Sector Bank
1 Allahabad Bank Public Sector Banks
2 Andhra Bank Public Sector Banks
3 Bank of Baroda Public Sector Banks
4 Bank of India Public Sector Banks
5 Bank of Maharastra Public Sector Banks
6 Canara Bank Public Sector Banks
7 Central Bank of India Public Sector Banks
8 Corporation Bank Public Sector Banks
9 Dena Bank Public Sector Banks
10 IDBI Bank Ltd. Public Sector Banks
11 Indian Bank Public Sector Banks
12 Indian Overseas Bank Public Sector Banks
13 Oriental Bank of Commerce Public Sector Banks

17
14 Punjab & Sind Bank Public Sector Banks
15 Punjab National Bank Public Sector Banks
16 State Bank of India Public Sector Banks
17 Syndicate Bank Public Sector Banks
18 UCO Bank Public Sector Banks
Private Sector Bank:-
Private Sector Bank
1 Axis Bank Ltd. Private Sector Banks
2 Catholic Syrian Bank Ltd. Private Sector Banks
3 City Union Bank Ltd. Private Sector Banks
4 DCB Bank Ltd. Private Sector Banks
5 Federal Bank Ltd. Private Sector Banks
6 HDFC Bank Ltd. Private Sector Banks
7 ICICI Bank Ltd. Private Sector Banks
8 IDFC Bank Ltd. Private Sector Banks
9 Indus Ind Bank Ltd. Private Sector Banks
10 Jammu & Kashmir Bank Ltd. Private Sector Banks
11 Karnataka Bank Ltd. Private Sector Banks
12 Karur Vysya Bank Ltd. Private Sector Banks
13 Kotak Mahindra Bank Ltd. Private Sector Banks
14 Nainital Bank Ltd. Private Sector Banks
15 South Indian Bank Private Sector Banks
16 Tamilnad Mercantile Bank Ltd. Private Sector Banks
17 The Ratnakar Bank Ltd. Private Sector Banks
18 Yes Bank Ltd. Private Sector Banks

18
ELIGIBILITY CRITERIA FOR PARTNER INSTITUTIONS :-
I. SCHEDULED COMMERCIAL BANKS:-
A. Public Sector Banks:-
 Should have earned profit during the last 2 years failing which minimum external rating of long
term instruments not below A-(minus) from accredited credit rating agencies.
 Level of Net NPAs not exceeding 15%.
 CRAR as stipulated by RBI from time to time.
 Net worth above Rs.250 crores.
B. Private Sector Banks:-
 Should have earned profit during the last 2 years failing which minimum external rating of long
term instruments not below A-(minus) from accredited credit rating agencies.
 Level of Net NPAs not exceeding 10%.
ELIGIBILITY
CRITERIA
SCHEDULED
COMMERCIAL
BANKS
MICRO FINANCE
INSTITUTIONS
NON BANKING
FINANCE
COMPANIES
(NBFCs)
Public
Sector
Banks
Private
Sector
Banks
Regional
Rural
Banks Larger
NBFCs
SMALL
NBFCs

19
 Net worth above Rs.250 crore.
C. Regional Rural Banks:-
 Should have earned net profit for preceding two years.
 Level of Net NPAs equal to or less than 6%.
 Net Owned Fund above Rs.50 crore.
D. Small Finance Banks :-
 Should have been granted final license by Reserve Bank of India (RBI) for carrying on Small
Finance Bank business and have commenced operations of the Small Finance Bank.
 SFB/previous entity prior to conversion into SFB (taken together) should have earned profits
during last 2 financial years.
 Should have sizeable outstanding portfolio (> `500 crore) comprising advances to micro/small
enterprises in respect of income generation in manufacturing, services, trading or activities allied
to agriculture /other activities approved/to be approved under PMMY loans from time to time.
 Should have strong fundamentals based on last audited balance sheet .
 Net worth greater than or equal to 100 crore.
 Gross NPA less than or equal to 5%.
II. MICRO FINANCE INSTITUTIONS:-
 Should be a registered legal entity lending to micro units meeting the loan size criteria of
MUDRA (which is presently loan size of Rs.1 lakh or as stipulated by RBI from time to time) for
at least 3 years or the promoters /management should have an experience of at least 10 years.
 Having a minimum outreach of 3000 existing borrowers.
 Should have received minimum capacity assessment rating as indicated below : Mfr-4 (equivalent
to CRISIL) for TN, Kerala, Karnataka and Pondicherry
 Mfr-4 (equivalent to CRISIL) for Tier-I and Tier-II MFIs and Mfr-5 for the Tier-III MFIs in other
remaining states.
 Should have suitable systems, processes and procedures such as internal accounting, risk
management, internal audit, MIS, cash management etc.
 Should target own account enterprises within micro units category i.e. business run by the owner.
 Meeting the minimum CRAR and other norms stipulated by RBI for MFIs registered as NBFC-
MFIs and comply all the prevailing RBI guidelines, including pricing etc.

20
 Three years profitable track record, Recovery performance not less than 90%, Portfolio at Risk >
90 days below 5% (relax able up to 7% on case to case basis) for MFIs.
 Should be a member of credit bureaus as per RBI policy.
 Has a minimum term loan/refinance requirement of Rs.0.50 crore.
 Targets the poor, especially women and is secular.
 Has audited financial statements (in case of NGO with microfinance as a program, the NGO
should have separate audited financial statements for the MFI program) and
 For NBFCs or any other MFI set up for/by taking over the existing MF operations of another
entity, track record of the earlier entity can be considered for existence, past ratings etc.,
guidelines relating to value of FDRs to be placed as security etc. subject
 To continuity of promoters/senior management/transfer of major (> 60%) part of the MF
operations of the earlier entity.
 MUDRA’s loan to be on lent by MFIs for use by borrowers in; setting up/running non- farm
income generating activities and micro/small enterprises including trading activities/services.
III. NON BANKING FINANCE COMPANIES (NBFCs) :-
A. Larger NBFCs i.e. Assets size > Rs.500 crores
 The NBFC should be registered with RBI as Asset Finance Company (AFC) or Loan Company.
In respect of NBFC-Loan Company, a CA certificate that if the loan is given for income
generating activities, 60% of the income comes from productive assets should be furnished. Two
Tier NBFCs extending loan / resource support to MFIs (both NBFC-MFIs and non-NBFC MFIs
complying with RBI norms for NBFC-MFIs or priority sector status) for on lending to ultimate
borrowers would also be considered
 NBFC should have been in business for 5 years and should have earned Net Profit for last 3 years.
In case of the NBFCs financing second hand vehicles, the NBFC needs to have experience of 3
years in the activity and also have recorded profit during the period.
 Minimum Net Owned Fund of Rs.20 crores and Minimum Asset size of Rs.500 crores.
 CRAR-Minimum 15%.
 Minimum Gross NPA & Net NPA would be based on rating of agency.
 External rating range of BBB+ and above.
B. SMALLER NBFCs i.e. Asset size less than Rs.500 crores :-

21
 The NBFC should be registered with RBI as Asset Finance Company (AFC) or Loan Company.
In respect of NBFC-Loan Company, a CA certificate that if the loan is given for income
generating activities, 60% of the income comes from productive assets should be furnished. Two
Tier NBFCs extending loan / resource support to MFIs (both NBFC-MFIs and non-NBFC MFIs
complying with RBI norms for NBFC-MFIs or priority sector status) for on lending to ultimate
borrowers would also be considered
 Should have been in business for 5 years and earned Net profit for last 3 years. In case of the
NBFCs financing second hand vehicles, the NBFC needs to have experience of 3 years in the
activity and also have recorded profit during the period. Preference may be given to NBFCs
enjoying well conducted credit facilities from Scheduled Commercial Banks.
 Minimum Net Owned Fund of Rs.15 crore and Minimum Asset size of Rs.25 crore.
 The NBFC normally has done lending business of at least Rs.20 crore during the immediately
preceding financial year.
 CRAR-Minimum 15%.
 Minimum Gross NPA & Net NPA would be based on rating of agency.
 External rating range of BB- and above.
Report card of MUDRA Yojana:- Last 4year
Pradhan Mantri MUDRA Yojana (2018-2019 Provisional) - Himachal Pradesh
[Amount Rs. in Crore]
Shishu
(Loans up to Rs. 50,000)
Kishor
(Loans from Rs. 50,001 to
Rs. 5.00 Lakh)
Tarun
(Loans from Rs. 5.00 to Rs.
10.00 Lakh)
Total
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
37391 124.47 101.79 39785 870.18 774.61 8506 714.94 673.82 85682 1709.5
9
1550.22

22
Pradhan Mantri MUDRA Yojana (2017-2018) - Himachal Pradesh
Shishu
Kishor
Rs. 5.00 Lakh)
Tarun
10.00 Lakh)
Total
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
41978 123.60 112.39 40262 993.76 939.15 9752 783.19 749.90 91992 1900.5
5
1801.44
Pradhan Mantri MUDRA Yojana (2016-2017) - Himachal Pradesh
Shishu
Kishor
Rs. 5.00 Lakh)
Tarun
10.00 Lakh)
Total
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
No Of
Sancti
ons
Sancti
oned
Amt
Disburse
ment
Amt
49158 107.20 99.35 27283 635.74 599.24 6410 538.78 515.43 82851 1281.7
2
1214.02
The comparative position of sanction and disbursement in the last 2 financial years:-
Category FY 2016-17 FY 2017-18
Amount
sanctioned
Amount
disbursed
Amount
sanctioned
Amount
Disbursed
Banks 1,886.73 1,886.73 4,655.73 4,405.73
MFIs 820 787 446.50 369.50
NBFCs 399 399 1,137.00 1,005.00
RRBs 181.79 181.79 516.75 516.75
SFBs - - 500 500
PTCs 271.42 271.42 721.92 704.07
Grand Total 3,525.94 7,977.90 7,501.05

23
CHAPTER. 2
REVIEW OF LITERATURE

24
REVIEW OF LITERATURE
Mol S.TP (2014), has clarified that there are some issues like money related Illiteracy ,absence of mind
fullness and client securing is high. Reserve Bank of India has started different activities to improved
money related consideration. Information and communication technology offers the opportunities
enhancement of financial inclusion.
Mehar L (2014), has showed that the financial inclusion in India has increased in the last few years with
new innovations like mobile banking, ultra small branches etc,
Roy, Anup Kumar (2016), has displayed that the small businesses are the foundation of economic
development. A major number of initiatives have been taken in the past few years in the right direction.
Dr. J. Venkatesh and MS. R. Lavanya Kumari (2017), has showed that be sides the schemes that are being
introduced for the overall growth and development of the MSME sector, initiatives have been
Launched which focus solely on entrepreneurs. The schemes will contribute to the well-being of the
individual sengagedin small scale industries which will positively affect the progress of the whole
economy.
Verma S. (2015), has explained that the design of MUDRA scheme will not only cater to the financial
problems of MSMEs but also give moral support to a lot of young population to become an entrepreneur.
Rudrawar, M. A. A. & Uttarwar, V. R. (2016) ,has explained that PMMY can bring a desired
transformation. If it will be applied properly yet the bottom level it may act as a game changing idea and
boost the Indian economy. It should include less documentation and easily accessible. In coming few
years, MUDRA will play a crucial role for the development of entrepreneurship, increase in GDP and
development of employment.
R. Rupa (2017), has showed that the MUDRA scheme is very much successful in Tamil Nadu. It is
found that the MFIs have contributed substantially to increase the number of accounts financed under the
PMMY.
Upadhva(2015), suggested that the public, private and cooperative financial institutions may encourage
SMEs by offering some incentives to SMEs. SMEs shall mould themselves into the changing scenario
and work more professionally to gain the strong financial support and build market for themselves and
also their products.

25
Rashid R. Pansare(2017), undertook a study on trends in financing the SSI sector in India. He found
that 31 lakh SSI units existed throughout the country, majority (80.5%) of them were proprietary
concerns whereas 16.8 per cent were functioning as partnership and private limited companies. He
concluded that finance to the SMEs
Prasain(2016) attempted to study the financing pattern of small scale industries in Impala East and West
districts of Manipur State. The sample consisted of 101 randomly selected SSI units selected through
stratified random sampling with proportional allocation to both districts. The sample size was determined
on the basis of a pilot survey. The data was collected on the amount of capital, borrowings and repayment
of borrowings during June-September 2005. In view of the financial mismanagement of the industry,
they had suggested (a) severe penalties may be levied on entrepreneurs found misusing the funds;(b)
timely and adequate finance depending on the operational cycle of the activity must be available to the
entrepreneurs; (c) shortage of working capital being the main factor responsible for slow commencement
of an industrial unit, proper handling of this problem is very important.
Allen et al.(2016), conducted research utilizing data from survey. According to their survey on 213
entrepreneurs, the three most important financing channels for these firms during their start-up and
growth periods are founders’ family and friends, trade credits and loans from financial institutions
including state owned banks and banks specialized in lending to small and medium sized firms (e.g. the
Small Industries Development Bank of India, or SIDBI, and State Financial Corporations, or SFCs.). In
the start-up phase, family constitutes the “extremely important” source of funds for an overwhelming
majority (over 85%) of the respondents. Internal funds appear to constitute a crucial source of funds at
the growth stage. They also found that entrepreneurs and investors rely more on informal governance
mechanisms such as those based on trust and relationships than formal mechanisms e.g., courts to resolve
disputes, overcome corruption and finance corporate.
Rani and Rao(2019) pointed out that concerted and well-orchestrated efforts are needed to achieve a
high degree of success. An effective monitoring mechanism, creation of credit-rating facilities, adoption
of standards for quality and environmental management, promotion of SME brands and development of
appropriate capital markets can improve the situation.
Raja(2005),concluded in his working paper that the lending to the SME sector grew by 69 per cent
between 200-01 and 2005-06. But there exists a stark disparity amongst small players and big players
within the SME sector. It was found that loans to bigger companies are growing at a faster pace than
loans to the SSI sector.

26
Bodla and Verma(2000), concluded in their study that the share of SSIs in net bank credit was
significantly higher in 1991-2000 than the later period (2001-2006). While the average percentages share
of SSI in total bank credit was15.96 during the period 1991-2000 it was just 11.52 per cent during 2001-
2006.

27
CHAPTER- 3
RESEARCH
METHODOLOGY

28
RESEARCH METHODOLOGY:-
Research Methodology is a way to systematically solve the research problem. The Research
Methodology includes the various methods and techniques for conducting a research. Research is an art
of scientific investigation. In other word research is a scientific and systematic search for pertinent
information on a specific topic. The logic behind taking research methodology into consideration is that
one can have knowledge about the method and procedure adopted for achievement of objective of the
project. The present research Methodology consist the flowing things needs of the study, scope of the
study, objectives of the study, data collection, sample design and analysis instrument. The detailed
description is given under the flowing heads.
NEED OF THE STUDY:-
The need of the study is to know the knowledge level of people and determine their awareness level
regarding various loan schemes under the PMMY scheme.
SCOPE OF THE STUDY:-
The scope of the study was limited to Distt Kangra in HP.
OBJECTIVES OF THE STUDY:-
 To study the perception of people toward Pradhan Mantri MUDRA Yojana
 To study the knowledge level of people toward Pradhan Mantri MUDRA Yojana.
RESEARCH DESIGN:-
Research design is the conceptual structure within which research is conducted. It constitutes the
blueprint for collection, measurement and analysis of data was a descriptive research. Descriptive
research involves collecting numerical through self-reports collected, through questionnaires or
interviews (person or phone), or through observation. For present study, the research was descriptive and
conclusion oriented.
SAMPLING DESIGN:-
1. Sampling unit – The target people must be defined that has to be sampled. The sampling unit of
research included that awareness toward Pradhan Mantri Mudra Yojana in Distt. Kangra in HP.
2. Sample size – This refers to number of respondents to be selected from the universe to constitute a
sample. The sample size of 50

29
3. Sampling Technique – Convenience Sampling was used to select the sample. Convenient sampling is
a non probability sampling technique that attempts to obtain a sample of convenient elements .In case of
convenience sampling, the selection of sample depends upon the discretion of the interviewer. In this
project, Questionnaire Method was used for the collecting the data. With the help of this method of
collecting data, a sample survey was conducted.
DATA COLLECTION: -
Information has been collected from both Primary and Secondary Data.
 Primary data: - Primary data are those which are fresh and are collected for the first time, and
thus happen to be original in character. The primary data was collected through direct personal
interviews (open ended and close ended questionnaires), Observation Method, Interview Method
and Scheduling Method etc.
 Secondary data: - Secondary data are those which have already been collected by someone else
and which already had been passed through the statistical process. The secondary data was
collected through web sites, books and magazines etc.
For the present study purpose primary data is used. Primary data questionnaire method is collected
through questionnaire method. This questionnaire is self administrated questionnaire & it is divided into
two sections- Section A and Section B.
Section A consist the questions regarding Personal Information. E.g. - Name, Gender, Qualification, Age.
Section B consist the question which fulfill the research objectives and it contains 14 questions.
ANALYSIS TOOLS/INSTRUMENTS:-
To analyze the data obtained with the help of questionnaire, following tools/instruments were used.
1. Likert scale: These consist of a number of statements which express either a favorable or
unfavorable attitude towards the given object to which the respondents are asked to react. The
respondent responds to in terms of several degrees of satisfaction or dissatisfaction.
2. Percentage and Pie Charts: These tools/instruments were used for analysis of data.
Formula of Percentage Method
P: - Q / R 100
P: - Reading in percentage
Q: - Number of respondent bulling in the specific to the Measure.

30
R: - Total number of respondent exit is the population as a wheel.
LIMITATIONS OF STUDY:-
It is said, “What is worth doing is worth doing best”. In other words a person should aim at perfection.
Human have to work within the limitation set by the nature and society. That is to say even though every
possible effort has been made to make this project report authentic and comprehensive however many
constraints were also at play. The major limitations of the study are:-
 Due to time and resources a countrywide survey was not possible. .
 Some of the respondents could not answer the questions due to lack of knowledge

31
CHAPTER 4
DATA ANALYSIS
&
INTERPRETAION

32
Table 4.1
Classification of the respondents on the basis of Gender:
Figure 4.1
SOURCE: - Data collected through questionnaire method.
Interpretation:-
From the above table it is clear that majority of the respondents that is 60% are male where as only
40%respondents are female. Thus it can be concluded that there is a preponderance of male respondents
over the females.
60%
40%
Gender
Yes No
S.NO Gender Total Percentage
1 Male 30 60%
2 Female 20 40%
TOTAL 50 100%

33
Table 4.2
Classification of the Respondents on the basis of their age:-
S.No. AGE No. of Persons Percentage
1 BELOW 20 8 16%
2 20-40 35 70%
3 40- 50 7 14%
4 50 above 0 0%
Total 50 100%
Figure 4.2
Interpretation:
From the above table it is clear that 16% of the respondents are of age group of below 20,20-40 are 70%,
40-50 – 14% and above 50 is 0% . thus it can be concluded that there is a majority of the respondents in
the group of 20-40 of people i.e. 70%.
16%
70%
14%
0%
Age
BELOW 20 20-40 40- 50 50 above

34
Table 4.3`
Classification of the Respondents on the basis of their Education Qualification
S.No. Education Qualification No. of Person Percentage
1 Matriculation 2 4%
2 10+2 6 12%
3 Graduation 18 36%
4 Post Graduation 21 42%
5 Any Other 3 6%
Total 50 100%
Figure 4.3
Interpretation:
From the above table it is clear that majority of the respondents that is 42% are Post graduate which is
closely followed by respondents who have Graduate. Thus it can be conclude that there is a majority of
the respondents are Post graduate where as minority of the respondents are matriculate.
7%
14%
36%
38%
5%
Matriculation
10+2
Graduation
Post Graduation
Any Other

35
Table 4.4
Classification of the Respondents on the basis of their Occupation:-
S.No. Occupation No. of Person Percentage
1 GOVT. Employee 7 14%
2 Professional 5 10%
3 Business 7 14%
4 Student 26 52%
5 Agriculture 5 10%
Total 50 100%
Figure 4.4
Interpretation:
From the above table it is clear that majority of the respondents that is52% are student which is closely
followed by respondents who have Businessman. Thus it can be conclude that there is a majority of the
respondents are Student where as minority of the respondents are Agriculture.
14% 10%
14%
52%
10%
Occupation
GOVT. Employee
Professional
Business
Student
Agriculture

36
Table 4.5
Classification of the Respondents on the basis of their Income:-
S.No. Annual Income No. of Persons Percentage
1 Below Rs.100000 30 60%
2 Rs. 100000 - Rs. 300000 13 26%
3 Rs. 300000 - Rs. 500000 7 14%
4 Above Rs.500000 0 0%
Total 50 100%
Figure 4.5
Interpretation:
From the above table is clear a majority of respondent have below 100000 RS income which is 60% of
the total respondent and closely follow by 100000-300000 income group.Thus it can be conclude that
there is a majority of the respondents are below100000 income group where as minority of the
respondents are above 500000 RS income group
Below Rs.100000
60%
Rs. 100000 -
Rs. 300000
26%
Rs. 300000 - Rs.
500000
14%
Above Rs.500000
0%
Annual Income

37
Table 4.6
Classification of the Respondents on the basis of their awareness about Pradhan Mantri MUDRA
Yojana (PMMY)
S.No. Response No. Of respondent Percentage
1 yes 40 80%
2 NO 10 2o%
Total 50 100
Figure 4.6
Interpretation:
From the above table and figure it is clear that majority of the respondent i.e. 80% respondents say yes
and 20%respondents say no towards awareness about Pradhan Mantri MUDRA Yojana (PMMY)?
80%
20%
Response
yes NO

38
Table 4.7
Classification of the Respondents on the basis of response if aware then tells me in which year
Pradhan Mantri MUDRA Yojana (PMMY) was launch.
S.No. Year No. of Persons Percentage
1 2013 4 10%
2 2014 5 12%
3 2015 21 52%
4 2016 7 18%
5 2017 3 8%
6 2018 0 0%
Total 40 100
Figure 4.7
Interpretation:
From the above table majority of respondent says which are a 52% PMMY is launch in 2015 &Closely
follow by 18% of respondent which say PMMY launch in 2016. And 12% respondent are say PMMY
was launch in 2015
10%
12%
52%
18%
8%0%
year
1 2 3 4 5 6

39
Table 4.8
Classification of the Respondents on the basis how of mean by which they come to know about
Pradhan Mantri MUDRA Yojana (PMMY)
S. No. Response No. of Respondents Percentage
1 Friends &Relatives 8 20%
2 Advertisement & Media 20 50%
3 Bank or Financial institution 12 30%
4 Any other 0 0%
Total 40 100%
Figure 4.8
Interpretation:
In above table shows that , out of 40 respondent 59% come to know about PMMY by advertisement
&media ,30% from bank or financial institution &20%of the respondent come to know about PMMY
through friends & relatives.
20%
50%
30%
0%
Response
Friends &Relatives Advertisement & Media Bank or Financial institution Any other

40
Table 4.9
Classification of the Respondents on the basis of awareness about main objective of Pradhan
Mantri MUDRA Yojana (PMMY)
S.No. Response No. of Respondents Percentage
1 YES 35 87%
2 N0 5 13%
Total 40 100%
Figure 4.9
Interpretation:
In above table show, in out of 40respondent, 87% respondents were knowing the objective of PMMY
and remaining 13% respondent were not aware about the objective of PMMY.
87%
13%
YES
N0

41
Table 4.10
Classification of the Respondents on the basis of selection of main objective of Pradhan Mantri
MUDRA Yojana (PMMY)?
S.No Response No. of Respondents Percentage
1 Development of micro enterprise sector 25 72%
2 Refinance support 4 11%
3 Purchase of equipment & new technology 6 17%
4 Any Other (Please Specify) 0 0%
Total 35 100%
Figure 4.10
Interpretation:
In above table, 72% respondent says development of micro enterprise is a main objective of
PMMY, 11 % says refinancing support &17%say purchase of equipment & new technology for micro
industry.
72%
11%
17%
0%
Response
Development of micro enterprise sector Refinance support
Purchase of equipment & new technology Any Other (Please Specify)

42
Table 4.11
Classification of the Respondents on the basis of awareness about maximum limit of loan under
this Scheme.
S.NO. Response No. of Respondent Percentage
1 YES 36 90%
2 NO 4 10%
Total 40 100%
Figure 4.11
Interpretation:
In above table , there are 29 respondent where 90% Respondent have know the limit of taking loan under
this scheme and 10% respondent have not know the limit of loan .So be can conclude a maximum
respondent have know the loan limit under PMMY.
90%
10%
Response
YES
NO

43
Table 4.12
Classification of the Respondents on the basis of selection of maximum limit of loan under the
Pradhan Mantri MUDRA Yojana (PMMY).
S.No. Loan amt. (LAKH) No. of Respondent Percentage
1 Below Rs.300000 5 14%
2 Rs.600000 10 28%
3 Rs.800000 4 11%
4 Rs.1000000 15 42%
5 Above Rs.2000000 2 5%
Total 36 100%
Figure 4.12
Interpretation:
In above table , 42% respondent have say RS1000000 is maximum limit followed by 28% respondent
which say RS 6000000 is a limit , 14% says RS below 300000 and remaining 11% and 5% respondent
says RS800000 and RS 2000000 is a limit of taking loan under this scheme.So be can conclude majority
of respondent says RS1000000 is a maximum limit of taking loan under PMMY.
14%
28%
11%
42%
5%
Response
Below Rs.300000
Rs.600000
Rs.800000
Rs.1000000
Above Rs.2000000

44
Table 4.13
Classification of the Respondents on the basis of awareness level about Categories of funding of
loan in this scheme.
S.No. Response No. of Respondent Percentage
1 Yes 36 90%
2 No. 4 10%
Total 40 100%
Figure 4.13
Interpretation:
In above be can see, A 90% respondent is says yes and remaining 10% says no .So be can conclude
majority of respondent have know the categories of funding in this PMMY scheme.
90%
10%
Response
yes No.

45
Table 4.14
Classification of the Respondents on the basis of knowledge toward Financial Institutions
Shortlisted to Be Service provider in MUDRA Yojana for funding.
S.NO. Response NO. of Respondent Average
1 Yes 37 92%
2 No 3 8%
Total 40 100%
Figure 4.14
Interpretation:
In above table a 92 % of respondent Know the financial institution which offer services under this
scheme and 8 % not know about the these institution. So be can conclude majority of respondent know
the financial institutions which offer services under this scheme.
92%
8%
Response
Yes
No

46
Table 4.15
Classification of the Respondents on the basis of knowledge regarding the financial institution is
not a service provider of this scheme?
S.No. Name of the Financial institution NO. of Respondent Percentage
1 Aditya Birla Finance Ltd. 7 17%
2 State Bank of India 9 22%
3 Punjab National Bank 11 27%
4 Axis Bank Ltd 5 13%
5 HDFC Bank Ltd. 2 5%
6 ICICI Bank Ltd. 3 8%
7 India Infoline Finance Ltd (IIFL 0 0%
8 Kccb Bank Ltd 3 8%
9 If any other (Please Specify) 0 0%
Total 40 100%
Figure 4.15
Interpretation:
In above table , 22% and 27 % respondent says state bank of India & Punjab national bank have not
offer loan under this scheme or 17% respondent say Aditya Birla Finance LTD.is not offer loan under
this scheme .So be can conclude majority respondent thinks SBI &PNB is not a service provider.
17%
22%
27%
13%
5%
8%
0%
8%
0%
Response Aditya Birla Finance Ltd.
State Bank of India
Punjab National Bank
Axis Bank Ltd
HDFC Bank Ltd.
ICICI Bank Ltd.
India Infoline Finance Ltd (IIFL
Kccb Bank Ltd
If any other (Please Specify)

47
Table 4.16
Classification of the Respondents on the basis of their response toward the benefits of Pradhan
Mantri MUDRA Yojana (PMMY) for Micro industry .
S.No. Response NO. of Respondents Percentage
1 Strongly agree 19 47%
2 Agree 12 30%
3 Neutral 5 12%
4 Disagree 3 8%
5 Strongly disagree 1 3%
Total 40 100%
Figure 4.16
Interpretation:
In above table ,out of 40 respondent ,47% strongly agree and 3% respondent are strongly disagree
PMMY is beneficial for Micro industry .So be can conclude majority of respondent strongly agree
PMMY is beneficial for micro industry of country .
47%
30%
12%
8%
3%
Response
Strongly agree Agree Neutral Disagree Stronglydisagree

48
Table 4.17
Classification of the Respondents on the basis of their awareness regarding the process of taking
loan under this scheme.
S.No. Response NO. of Respondent Percentage
1 Yes 36 90%
2 No. 4 10%
Total 40 100%
Figure 4.17
Interpretation:
In above table 90% respondent says yes and 10% says no to be can conclude majority of respondent are
know the process of taking loan under this scheme.
90%
10%
Response
Yes No.

49
Table 4.18
Classification of the Respondents on the basis of their response regarding opinions toward process
of taking loan in PMMY?
1 Vary easy 10 25%
2 Easy 15 37%
3 Neutral 6 20%
4 Complex 4 15%
5 Very Complex 1 3%
Total 36 100%
Figure 4.18
Interpretation:
In above table 37% respondent says easy 25% says very easy 20% says neutral and 15% says complex.So
be can conclude majority of people say a process of taking loan under this scheme is easy.
25%
37%
20%
15%
3%
Response
Vary easy Easy Neutral Complex Very Complex

50
Table 4.19
Classification of the Respondents on the basis of their response regarding PMMY effect to reduce
the dependency on informal financial institution (like money lenders).
S.No Response NO. of Respondents Percentage
1 Strongly Agree 19 47%
2 Agree 16 40%
3 Neutral 3 8%
4 Disagree 2 5%
5 Strongly Disagree 0 0%
Total 40 100%
Figure 4.19
Interpretation:
In above table , out of 40 respondent 47 % respondent are strongly agree , 40% are agree and 8%, 5% are
neutral and disagree PMMY is reduce dependency on informal financial institution. So be can conclude
majority of respondent say PMMY is reduce a dependency on informal financial institution .
47%
40%
8%
5%0%
Response
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree

51
Table 4.20
Classification of the Respondents on the basis of their response regarding PMMY capablity toward
employment enhancement .
S.No Response NO. of Respondents Percentage
2 Agree 17 42%
3 Neutral 7 18%
4 Disagree 4 10%
Total 40 100%
Figure 4.20
Interpretation:
In above table out of 40 respondent 42% respondent are strongly agree and 30 % are agree , 18%or 10%
respondent are neutral or disagree toward PMMY is capable for provide employment in country So be
can conclude majority of respondent strongly agree toward PMMY is capable for provide employment in
country.
30%
42%
18%
10%
Response
Strongly Agree Agree Neutral Disagree

52
Table 4.21
Classification of the Respondents on the basis of their response regarding PMMY,s effectiveness to
measure or solve the financial problems of Micro industry .
2 Agree 13 32%
3 Neutral 11 28%
4 Disagree 4 10%
Total 40 100%
Figure 4.21
Interpretation:
In above table out of 40 respondent 32% agree , 30% strongly agree, 28% neutral and 10% are disagree
toward PMMY is an effective policy to measure or solve the financial problems of Micro industry of
India. So be can say majority of respondent are agree and strongly agree
30%
32%
28%
10%
0%
Response
Strongly Agree Agree Neutral Disagree Strongly Disagree

53
.
Table 4.22
Classification of the Respondents on the basis of their response regarding knowledge of limit of
loan provided under PMMY for Micro Industry in H.P.
1 Yes 30 75%
2 No. 10 25%
Total 40 100%
Figure 4.22
Interpretation:
In above table out of 40 respondent 75% respondent are says yes and 25 %says no. So be conclude
majority of respondents are aware about loan give to the Micro industry in Himachal Pradesh under this
scheme in 2018 to 2019.
75%
25%
Response
Yes No.

54
Table 4.23
Classification of the Respondents on the basis of their response regarding limit of loan amount
under PMMY.
S.No. Amt.(cr) NO. of Respondent Percentage
1 RS1669.2 10 33%
2 RS.1829.79 11 37%
3 RS.1779.78 5 17%
4 RS.1659.78 4 13%
Total 30 100%
Figure 4.23
Interpretation:
In this majority of respondent 37% says RS1829.79cr is, 33% says 1669.2cr, 17% says 1759.78 or13%
says 1659.78cr.So be conclude majority of respondent says 1829.79 is that amt. which given under
scheme for micro industry in HP
33%
37%
17%
13%
Response
RS1669.2 RS.1829.79 RS.1779.78 RS.1659.78

55
Table 4.24
Classification of the Respondents on the basis of their response regarding PMMY’s effect toward
improperness economic growth?
2 Agree 17 42%
3 Neutral 6 15%
4 Disagree 1 3%
Total 40 100%
Figure 4.24
Interpretation:
In above table out of 40 respondent 42% agree, 37% strongly agree, 15 % respondents are neutral or 3%
and3% are disagree or strongly disagree toward PMMY is helpful in improving the country economic
growthSo majority of respondent think or agree PMMY is helpful in growth of economy of country
37%
42%
15%
3% 3%
Response
Strongly Agree Agree Neutral Disagree Strongly Disagree

56
Table 4.25
Classification of the Respondents on the basis of their response regarding the need to extant of
awareness about this scheme.
S.No. Response NO. of Respondent Percentage
1 Yes 29 72%
2 No 11 28%
Total 40 100%
Figure 4.25
Interpretation:
So above table out of 40 respondent 72% says yes for pace the extant of awareness about this scheme and
28% says no for pace the extant of awareness about this scheme. So be can conclude there need to extent
the awareness of people.
72%
28%
Response
Yes
No

57
CHAPTER 5
FINDINGS
COCLUSION & SUGGESTIONS

58
Findings
 Majority of respondents 50% have heard about PMMY from media advertisement.
 Majority of respondents (80%) are aware about PMMY scheme.
 Majority of respondents agree PMMY is helpful in growth of the country
 Majority of respondents are know the process of taking loan under this scheme
 Majority of respondents are agree PMMY is capable to solve the problem of micro industry
 Majority of respondents are agree PMMY is capable to provide employment in country.
 Majority of respondents are (96%) know the loan categories under this scheme.
 Majority of respondents are (87%) know the main objective of PMMY scheme.
 Majority of respondents know maximum loan under this scheme.
 Majority of respondents know the service provider under this scheme
 Majority of respondents are known how much loan give to the Micro industry in Himachal
Pradesh under this scheme in 2018 to 2019?.
Conclusion:-
MUDRA has been formed with primary objective of developing the micro enterprise sector in the
country by extending various supports including financial support in the form of refinance, so as to
achieve the goal of funding the unfunded. Subsequently GOI has also decided that MUDRA will provide
refinance support, monitor the PMMY data by managing the web portal, facilitate offering guarantees for
loans granted under PMMY and take up other activities assigned to it from time to time. Accordingly
MUDRA has been carrying out these functions over the last one year.
According my study mostly people are aware about Pradhan Mantri Mudra Yojana. In study people’s
response is Pradhan Mantri Mudra Yojana capable to provide employment in country. So MUDRA will
provide refinance support for Micro Industry Most people know about then process of taking a loan in
Pradhan Mantri Mudra Yojana. .Therefore, the government has to brings awareness in potential Pradhan
Mantri Mudra Yojana through conducting awareness programmers, showing film slides, T.V interview,
panel discussion, seminars, workshops, and symposiums.
Suggestions /Recommendations:-
Pradhan Mantri Mudra Yojana aim to empower every Indian and enable them to stand on their own feet.
The programmed recognizes the challenges faced by micro industry and women entrepreneur in setting
up enterprises, obtaining loans and other support needed from time to time for succeeding in business
.The programme, therefore, endeavors to create an ecosystem which facilitates and continues to provide a

59
supportive environment for doing business. The objective of the Pradhan Mantri Mudra Yojana To be an
integrated financial and support services provider par excellence benchmarked with global best practices
and standards for the bottom of the pyramid universe for their comprehensive economic and social
development.
The focus area, with regards to implementation of Pradhan Mantri Mudra Yojana is listed below.
 Increasing loans sanctioned and disbursed by financial institutions.
 Connecting request of potential borrowers to the right handholding entities.
 Handholding events organized subsequent to sanction of loan.
 Converging Pradhan Mantri Mudra Yojana with existing schemes of govt. of India or state govt.
 Adopting innovation methods for implementation of scheme.
 Ensuring transparency and accountability in implementation of the scheme.
 Government should run awareness program for people’s awareness of Pradhan Mantri Mudra
Yojana scheme.
 Pradhan Mantri Mudra Yojana should have separate plans for woman borrower.
 Essential to provide adequate training on planning, organizing, directing, controlling of
Marketing and finance

PROJECT REPORT ON MUDRA LOAN

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to PROJECT REPORT ON MUDRA LOAN

Similar to PROJECT REPORT ON MUDRA LOAN (20)

Recently uploaded

Recently uploaded (20)

PROJECT REPORT ON MUDRA LOAN