Pradhan Mantri MUDRA Yojana is aimed at
Answer & explanation
Answer: (a) bringing the small entrepreneurs into formal financial system
MUDRA Yojana (announced 8 April 2015) gives loans to small and micro enterprises that were mostly left out of formal banking, so that they need not depend on informal lenders. Its purpose is to bring such small entrepreneurs into the formal credit system.
- ✓ (a) The scheme was designed for the crores of small units that stand outside the formal banking system and borrow from informal sources; it offers Shishu, Kishore, Tarun (and later Tarun Plus) loans through banks, NBFCs and micro-finance institutions.
- ✗ (b) MUDRA loans go to income-generating micro enterprises in manufacturing, trading and services. It is a business-loan scheme, not a scheme of crop loans for farmers.
- ✗ (c) MUDRA is a credit scheme for enterprises; it does not pay pensions to anyone.
- ✗ (d) MUDRA lends to enterprises through financial intermediaries; it does not fund voluntary organisations for skill development.
Remember · MUDRA = Micro Units Development & Refinance Agency: collateral-free loans up to a set limit to small enterprises, to bring them into formal credit.
Sources
- MUDRA Loan Scheme: Salient Features (MUDRA Ltd., Government of India) ↗ · reference work “Most of these units are outside the formal banking system and hence are forced to borrow from informal sources or use their limited owned funds. MUDRA Loan Scheme has been proposed to bridge this gap.”
- Pradhan Mantri Mudra Yojana completes 10 years (Press Information Bureau, Ministry of Finance) ↗ “the scheme extended collateral-free loans to bridge the gap in timely and affordable financing for small enterprises that faced significant challenges in accessing formal institutional credit.”
Question and answer: UPSC's official GS Paper I (2016, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·