The Indian government took a major step in 2015 to address the urgent demand for easily accessible loans for micro and small businesses (MSEs) with the launch of the Pradhan Mantri Mudra Yojana (PMMY). Through banks, microfinance institutions, and non-banking financial organizations, the plan has been instrumental in promoting self-employment and entrepreneurship by offering collateral-free loans up to ₹10 lakhs. The enormous informal sector, agricultural economy, and unemployment issues in Uttar Pradesh, India's most populous state, have made PMMY's contribution especially notable. Through state-level data analysis, socioeconomic consequences assessment, and gap identification, this article investigates the effects of PMMY on employment creation and business development in Uttar Pradesh. The program is a developmental instrument that aims to change India's entrepreneurial scene rather than just being a financial offering. In a nation where a sizable fraction of micro-entrepreneurs lacks tangible assets to guarantee, its emphasis on collateral-free lending is essential. Because of Uttar Pradesh's socioeconomic diversity, PMMY serves as a link between opportunities in the city and the dreams of the countryside. The creation of the Shishu, Kishore and Tarun categories has made sure that credit support is customized to meet the needs of businesses at different phases rather than being a one-size-fits-all strategy. The analysis of PMMY's impact is particularly pertinent given the state's sizable youth population and excess labor force. the goal is to promote financial inclusion, enable entrepreneurship and generate employment Uttar Pradesh as India’s most populous state, with a large rural and agrarian population and high unemployment rates historically and significant social and economic diversity, presents a crucial case to study how pmmy works on the ground. This paper explores how PMMY has contributed to fostering entrepreneurship and employment in Uttar Pradesh, what its strength and limitations are, and what policy measures could enhance its effectiveness.