Mudra Loan and Growth Path of Micro Small and Medium Enterprises in India

Abstract

The primary goal of this study is to ascertain the significant effects of Mudra Loan on Micro, Small, and Medium Enterprises (MSME). The majority of those operating small businesses lacked education, maintained improper books of accounts, and failed to follow other legal requirements. Therefore, the banks found it challenging to extend credit to such individuals for business growth and other development endeavours. Therefore, these people looked to the unorganised banking sector for credit loans and other credit facilities, which came with strict terms and conditions and a high rate of interest. MUDRA appears to be the most advantageous option for small borrowers who have trouble getting loans from other commercial institutions to fill this gap. If a person wishes to work for themselves and start their own business, the idea of a small business will drive them to establish a new business or industry. These MSMEs significantly contribute to giving local or rural residents job options. When more people choose to work for themselves, both the GDP and per-capita income will rise. Recent statistics indicate that MSMEs provide 49% of all exports from India, which suggests that they are expanding. The objective of this paper is to examine the development and effectiveness of micro, small, and medium businesses in industrial estates. The government is offering and promoting a number of plans and programmes to aid in the development of MSMEs. The different issues that these MSMEs confront when carrying out their activities have also been explored in this study. The research paper is based on secondary sources that was gathered from several websites journal and articles. After conducting a review of the literature, it is possible to analyse the role played by MUDRA in promoting financial requirements for the agricultural and related sectors, SMEs/MSE, and MSME in order to build a $5 trillion economy.