Impact of Education and income on the Accessibility of MUDRA Loan Schemes: A Comparative Study

Abstract

The Pradhan Mantri MUDRA Yojana was launched with the primary vision of "funding the unfunded" by providing accessible, low-documentation credit to micro, small, and medium enterprises (MSMEs). As an important urban and economic hub in Uttar Pradesh—the state with the greatest cumulative MUDRA loan repayments in India—the Lucknow district serves as a critical landscape to assess the scheme's true socioeconomic impact. This study examines the impact of education and income on the accessibility of MUDRA loan schemes among beneficiaries, providing a comparative analysis across Lucknow region. It further evaluates the overall effectiveness of the scheme in driving financial growth among selected MSME entrepreneurs. The research utilizes an empirical, comparative approach, analyzing demographic variables and financial performance metrics. A paired t-test was deployed to measure changes in the income levels of selected beneficiaries before and after the implementation of the MUDRA intervention. The empirical findings reveal that socioeconomic demographics significantly influence how these financial resources are distributed and utilized. First, a clear disparity exists in scheme accessibility based on educational backgrounds, showing a statistically significant difference between individuals with technical versus non-technical qualifications in successfully securing MUDRA loans. Second, the scheme has catalyzed a highly significant increase (p < 0.001) in the income levels of MSME entrepreneur’s post-intervention, resulting in visible business expansion, credit availability, and formal company development. The study concludes that while the MUDRA scheme has driven tremendous economic development and enhanced financial inclusion in the Lucknow district, accessibility remains unevenly distributed across educational brackets. Addressing these systemic gaps for non-technical individuals is vital to maximizing inclusive entrepreneurial growth across the region.