Arun Jailtey said MUDRA Yojna will continue for the next few years.
Confident about MUDRA loan scheme benefitting the weakest section of the society, Finance Minister Arun Jaitley today said the government’s intent is not to give any “buksheesh” (tip) but to make people economically self-sufficient.
In a Facebook post, Jaitley said, “The model of the present Government is not to give ‘Buksheesh’ but to enable people to make them economically self-sufficient and live a life of dignity. MUDRA scheme will be a game changer over the next few years,”
Jaitley, last week, launched a mega credit drive under the MUDRA scheme, under which banks, NBFCs and MFIs will provide loans between 50,000 to Rs 10 lakh to the unfunded sections of the society.
“India may not be able to provide employment to all but our economy will strong enough to provide resources to the weakest to enable them to be self-employed and self-dependent,” Jaitley said in the post.
Already Rs 24,000 crore of loans have been distributed to 37 lakh beneficiaries under the scheme.
“I anticipate that this year the number of beneficiaries crossing 1.5 crores. This number will increase year after year,” the Finance Minister said.
There are estimated 24 crore families in India. Thus at the bottom of the economic structure were these unfunded sections of the society, he said.
They were dependent upon money lenders for loan on an exploitative rate of interest (24 to 36 per cent). India’s industrial, service and agricultural sector are still not strong enough to absorb them in the employment, he said.
There are 5.7 crore entrepreneurs in the unorganised sector who are responsible for creating 11 crore jobs.
Jailtey said MUDRA Yojna will continue for the next few years.
“The targeted beneficiaries are six crore people who need to be developed into India’s small entrepreneurs. They will all be issued Debit Cards, which will allow them withdrawal of money through ATMs. These people cannot afford securities and hence the requirement of furnishing securities will not applicable for loans to them,” he said.
These loans, he added will “not be given on the strength of personal and political connections” but linked to the business proposals of these potential entrepreneurs.
In Mundra Yojna, there are 120 partners which include public sector banks, private sector commercial banks, regional rural banks, NBFCs and MFIs.
In the current financial year, a total amount of Rs 1.22 lakh crore will be given to these unfunded sections of the Indian society, Jaitley said.
The three categories of loans are: Shishu upto Rs 50,000; Kishore upto Rs 5 lakh and Tarun upto Rs 10 lakh.
The Finance Minister said past experience has indicated that the recovery rate for such micro finance and similar loans is exceedingly high and the defaulter are few.