Socio-Economic Impact of MUDRA Loans: Evidence from Hailakandi District, Assam

Abstract

Pradhan Mantri Mudra Yojana (PMMY) was introduced to enhance financial inclusion by providing collateral-free credit to micro and nano-entrepreneurs. Despite extensive coverage, empirical evidence on its socio-economic impact in India’s backward regions remains limited. The present study examines the impact of Mudra loans on income, education expenditure and healthcare expenditure of beneficiaries in Hailakandi district of Assam. Primary data were collected from 250 beneficiaries using a structured questionnaire. Weighted Average Scores were used to assess perceived impacts, while paired sample t-tests compared pre- and post-loan conditions. One-way ANOVA was employed to examine variations across socio-economic dimensions. The results reveal a statistically significant increase in household income after availing Mudra loans, whereas improvements in education and healthcare expenditure are positive but comparatively modest. Income-related outcomes exhibit significantly higher gains than human-capital indicators. The findings suggest that while Mudra loans are effective in strengthening income-generating capacity, their broader socio-economic impact depends on complementary interventions in education, healthcare and skill development. The study contributes district-level evidence from North-East India and highlights the limitations of credit-led development in the absence of supportive infrastructure.

Keywords