MBA Journals Peer-reviewed management research from Consortium e-Learning Network

NOLEGEIN Journal of Entrepreneurship Planning, Development and Management

MUDRA Loan Scheme: A Comprehensive Review of Its Impact on MSMEs and Economic Inclusion

  1. Adarsh Chaturvedi
  2. Sanjay Shankar Mishra

Abstract

The MUDRA Loan Scheme is very vital for the vision of India in supporting its micro and small enterprises (MSME) sector, particularly among Scheduled Castes, Scheduled Tribes, Other Backward Classes, and women. Access to affordable, collateral-free credit empowers these communities to start up and expand their businesses in a manner that supports economic inclusion and fosters self-reliance. It has at the top of things, empowered women entrepreneurs, allowing them to achieve financial autonomy, while having a substantial impact on the local economy. Some challenges being faced by this scheme are rising NPAs, low outreach in rural areas, and inferior financial education among customers. Therefore, financial literacy, along with the strengthening of the banking infrastructure in rural regions, addressing repayment challenges, are the required prongs to help in improving the long-term sustainability and effectiveness of MUDRA Loans as a tool for inclusive economic growth. Development of such strategies would ensure that the scheme makes optimal use of the system and empowers marginal communities toward an equity-inscribed prosperous economic landscape for India
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