The loan amount sanctioned and disbursed in the current financial year under the government’ refinancing scheme for last mile lenders to micro and small businesses Mudra Yojana has surpassed the previous fiscal’s sanctions and disbursements.
Data from the scheme’s portal showed that as of March 08 loans amounting to Rs 4.82 lakh crore were sanctioned, of which Rs 4.744 lakh crore loans were disbursed to micro and small enterprises. In comparison, Rs 4.56 lakh crore loans were sanctioned, of which Rs 4.50 lakh crore loans were disbursed in FY23.
In terms of loan volume, 5.8 crore loans were sanctioned as of March 08 in the current fiscal while 6.23 crore loans were sanctioned in FY23.
Launched in 2015, the scheme extends collateral-free institutional credit up to Rs 10 lakh provided by member lending institutions (MLIs), that is, scheduled commercial banks (SCBs), non-banking financial companies (NBFCs) and microfinance institutions (MFIs).
Individuals with a business plan for small business enterprise can avail loan under the scheme for income-generating activities in the manufacturing, trading, service sectors and also for activities allied to agriculture across three loan categories, viz. Shishu (loans up to Rs 50,000), Kishor (loans above Rs 50,000 and up to Rs 5 lakh) and Tarun (loans above Rs 5 lakh and up to Rs 10 lakh).
Meanwhile, the total non-performing assets (NPAs) as a percentage of credit disbursed under the Mudra scheme stood at 2.68 per cent as of June 2023, according to the data shared by Bhagwat Karad, Minister of State in the finance ministry in the Rajya Sabha in December last year.
As of March 31, 2023, Mudra NPA level stood at 2.62 per cent, down from 3.17 per cent as of March 2022. NPAs are advances or loans that are overdue for more than 90 days.
“However, steps taken by PSBs (public sector banks) for recovery of NPA under PMMY include constant follow up and increased frequency of customer connect; settlement through Lok Adalats, service of legal notices and initiation of legal action in the form of civil suits, etc.; and restructuring of eligible accounts and One Time Settlement (OTS),” Karad had said.