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India’s Micro‑Loan Programme Pushes Financial Literacy for Small Entrepreneurs

Finance Minister Nirmala Sitharaman urged banks that provide loans under the Prime Minister’s Micro Units Development and Refinance Agency programme to increase financial‑literacy activities across all states.

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Key Points

4 points
1

Banks must conduct financial‑literacy sessions for loan beneficiaries.

2

Loans are provided without requiring collateral such as property.

3

Timely repayment improves credit scores, enabling access to bigger loans.

4

The programme complements the Prime Minister’s People’s Money Account Scheme that opened bank accounts for many without a minimum balance.

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Summary

The scheme, launched in 2015, offers collateral‑free credit to small entrepreneurs, allowing them to start or expand businesses.

Improved understanding of credit and disciplined repayment helps borrowers build a credit record and qualify for larger loans and regular banking services.

Success stories from beneficiaries in several states show how the programme supports job creation and business growth.

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New Words to Learn

4 words
Micro Units Development and Refinance Agency
A government program that gives small loans to people who want to start or grow a business.
Collateral‑free
No need to give a valuable item like a house as a guarantee for the loan.
Credit score
A number that shows how well someone has paid back loans in the past.
Beneficiary
A person who receives help or a loan from a program.
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