Catalysing Inclusive Growth: The Role of MSME Credit Schemes in India's Economic Development.

Abstract

This study evaluates the impact of three flagship MSME credit schemes—Pradhan Mantri MUDRA Yojana (PMMY), Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), and Prime Minister’s Employment Generation Programme (PMEGP)—on inclusive economic growth in India. Using data from 2015 to 2024 and policy analysis, it assesses each scheme’s contribution to credit access, risk mitigation, and employment generation. PMMY has shown sustained growth and high disbursement efficiency; CGTMSE has expanded guarantee coverage, especially in the post-pandemic period; and PMEGP has delivered cost-effective job creation despite recent fluctuations. The findings underscore the collective role of these schemes in advancing financial inclusion and entrepreneurship, offering policy insights to enhance equity, resilience, and long-term sustainability in MSME support.