Transforming Rural Women Entrepreneurs: The Role of MUDRA Yojana in Promoting Financial Inclusion and Digital Finance in Uttar Pradesh

Abstract

This study examines the impact of the Pradhan Mantri MUDRA Yojana (PMMY) on financial inclusion and the empowerment of rural women in Uttar Pradesh, with a specific focus on Aligarh district. The scheme, launched in 2015, aims to provide collateral-free micro-credit to small and micro-enterprises, including women entrepreneurs traditionally excluded from formal financial systems. Using a mixed-methods approach, the research compares 312 women beneficiaries of MUDRA loans with 125 non-beneficiaries to assess differences in access to finance, digital banking adoption, and empowerment outcomes. Primary data were collected through structured questionnaires, interviews, and focus group discussions, while secondary data were sourced from government and institutional reports. The findings indicate that MUDRA loans have significantly improved women’s access to banking services, enhanced their use of digital finance platforms, and contributed to increased income and financial independence. However, challenges such as digital literacy gaps, lack of follow-up support, and limited awareness of loan benefits remain. The study concludes that MUDRA Yojana plays a crucial role in promoting inclusive finance and enabling women’s economic participation. It recommends strengthening financial literacy, digital training, and business support services to maximize the long-term impact of the scheme on women’s empowerment in rural India.