The correct answer is option 1: bringing the small entrepreneurs into the formal financial system.
Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Government of India in April 2015 to provide funding support to micro and small enterprises (MSEs) in the country. The scheme aims to promote entrepreneurship among the unorganized sector and bring them into the formal financial system.
Under PMMY, loans are provided to micro and small businesses, traders, and vendors for their working capital and other business requirements. These loans are categorized into three categories - Shishu, Kishor, and Tarun, based on the stage of growth and funding needs of the enterprises.
The scheme has been specifically designed to cater to the funding requirements of the MSEs, which generally have limited access to formal credit due to their informal nature of business, lack of collateral, and other factors. By providing them with formal credit, PMMY helps these entrepreneurs to grow their business and generate employment opportunities.
In addition to providing financial support, the scheme also aims to provide non-financial support to the MSEs by connecting them with various training and skill development programs, marketing and promotional activities, and other support services.
Overall, Pradhan Mantri MUDRA Yojana is a comprehensive scheme that not only provides financial support but also aims to uplift the small entrepreneurs by bringing them into the formal financial system and providing them with access to various support services.