Key Highlights from SBI Report
Rising Share in Financially Underserved States:
- The State Bank of India report highlights a significant geographical shift in PMMY loan disbursement over the past decade, with increasing focus on states with historically lower financial inclusion.
State-wise Growth in Loan Share
- Bihar: Share increased from 5.67% in FY16 to 10.97% in FY25
- Uttar Pradesh: Share rose from 9.27% to 11.30%
- Odisha: Marginal increase from 4.24% to 4.51%
- North-East India: Witnessed steady growth in PMMY loans, reversing historic credit shortfalls
Reasons Behind the Shift
- Targeted policy interventions for under-served regions
- Increased ease of access to micro-credit for small businesses
- Focused efforts to reduce regional financial disparities
Loan Disbursement Trends and Growth Metrics
- Overall Sanctioning:
- Over ₹33 lakh crore sanctioned under PMMY in the last 10 years
- Average Loan Size:
- Increased from ₹38,000 in FY16 to ₹1.02 lakh in FY25
- Indicates scaling and maturity of micro and small businesses supported under the scheme
- Continued Presence in Industrial States:
- Maharashtra, Tamil Nadu, and Karnataka continue to dominate in absolute loan volumes
- However, a clear policy shift is visible toward more equitable distribution
- Role of Digital Platforms in Bridging Credit Gaps
- Platforms like ‘PSB Loans in 59 Minutes’ and ‘UdyamiMitra’ have expanded credit accessibility
- Launch of the Unified Lending Interface (ULI) is expected to further improve formal credit availability in low-penetration states
Remaining Challenges and Way Forward
- Identified Bottlenecks:
- Infrastructure gaps
- Low levels of financial literacy
- Lack of skill development and entrepreneurial training
- Recommendations:
- Sustained capacity building and financial education
- Creation of stronger market linkages to ensure long-term growth
- Integration of credit access with entrepreneurial support systems
The SBI report confirms that the PMMY has matured into a more inclusive scheme, now actively bridging regional disparities in credit distribution. While financial access has improved, the next phase must focus on enhancing usage, business sustainability, and economic empowerment at the grassroots level.
