Micro, small and medium enterprises is a vibrant, dynamic and fastest growing sector of Indian economy in complementary with the large industries. They are enormously contributing towards the socio-economic development of the country. The MSME sector contributes about 8% to GDP besides 45% to total manufacturing output, 40% to exports from country and provides employment to over 80 million people. In this background a need for a bank which exclusively supports the micro units was initiated and introduced which can support entrepreneurship and fulfill the financial needs of these units. MUDRA is an effort to ‘fund the unfunded’ like how microfinance has been to ‘bank the unbanked’. The paper aims to understand the Mudra yojana and its significance; to examine the progress of Mudra and to analyse the pattern and amount of loans advanced to Tamil Nadu. To conclude this PMMY which is a good initiative from the part of government to encourage entrepreneurs is going to bring about a dramatic change in the MSME sector. If the partner institutions support this MUDRA yojana in same spirit as in the year 2015–16, MUDRA hopes to achieve higher target.

KEYWORDS: MUDRA, Micro, small and medium enterprises, Small Business