MUDRA LOAN INITIATIVE & ENTREPRENEURIAL ECOSYSTEM – AN INVESTIGATION OF MUDRA LOAN BENEFICIARIES OF CENTRAL INDIA

Abstract

The micro and small businesses were facing the problem of financial support as they were denied finance from formal banking system.  The Pradhan Mantri Mudra Yojana (PMMY), an initiative for funding the unfunded by offering the micro and small business the financial support which is collateral free, was launched on 8 April, 2015.  This initiative has the potential to give stimulus to entrepreneurial ecosystem in the country and kick-start entrepreneurship for the potential micro and small businesses aspirants.  Hence the present study is relevant to evaluate the Mudra loan initiative in terms of its contribution in creating entrepreneurial ecosystem and the extent to which the small businesses are benefited from beneficiaries’ perspective.  The study is based on the Primary data of 288 Mudra loan beneficiaries in Nagpur district of Central India.  The study shows that the Mudra loan initiative helped the micro and small businesses to get much needed financial support to run and expand business, generate employment, enjoy commercial economies through larger purchases, networking with a greater number of suppliers, increase in average salary paid to the workers employed and also increase in profits earned.  Thus, to conclude Mudra loans have high potential to create entrepreneurial ecosystem in India in near future if equity in allocation is achieved and training component is incorporated during disbursement process.