Credit and Finance for MSMEs: The government has targetted Rs 3 lakh crore loan sanction under the Mudra scheme for FY22, down from Rs 3.21 lakh crore sanctioned in FY21, and Rs 3.37 lakh crore sanctioned in FY20.
Credit and Finance for MSMEs: Pradhan Mantri Mudra Yojana (PMMY), which was launched by Prime Minister Modi in April 2015 to promote entrepreneurship through micro-credit access, had reported majority loans sanctioned to women entrepreneurs since the scheme’s inception. As of June 25, 2021, 20.31 crore loans involving a sanctioned amount of Rs 6.86 lakh crore were extended to women entrepreneurs, according to the data shared by member lending institutions (MLIs) on the Mudra portal. This constituted 68 per cent of total loans and 43 per cent of the total amount sanctioned under the scheme in a little over the six-year period.
Institutional credit up to Rs 10 lakh is provided by MLIs for entrepreneurial activities to micro, small enterprises that help in creating income-generating activities in sectors such as manufacturing, trading, services, and activities allied to agriculture, Minister of State for Finance Ministry Bhagwat Karad had informed Rajya Sabha on Tuesday sharing the scheme’s data. The total loans sanctioned as of August 11, 2021, stood at 30.65 crore involving Rs 16.16 lakh crore, as per an analysis of the data available on the portal. Of the total amount sanctioned, Rs 15.66 lakh crore was disbursed.
“Higher women share is very encouraging because the government has been talking about providing access to finance to women entrepreneurs and the Mudra scheme has been one of the top programmes we talk about. It is the first scheme we look at when it is about financial awareness and financial literacy among women entrepreneurs and the scheme has very effectively given this information in the public domain. I believe the communication channel is clearer now,” Jahnabi Phookan, Immediate Past President, FICCI FLO and Director, JTI Group told Financial Express Online.
The average loan size under the Mudra scheme has been around Rs 52,000 while 88 per cent of the loans were ‘SHISHU’ category, according to a statement by Finance Ministry in April this year. While the majority beneficiaries were women entrepreneurs, around 24 per cent loans were given to new entrepreneurs, and 51 per cent loans were given to SC/ST/OBC borrowers. According to a survey by the Ministry of Labour and Employment, the scheme had helped in 1.12 crore net additional employment from 2015 to 2018 including 69 lakh women employees.
The government had targetted Rs 3 lakh crore loan sanction under the Mudra scheme for FY22, down from Rs 3.21 lakh crore sanctioned in FY21, and Rs 3.37 lakh crore sanctioned in FY20. According to Finance Ministry data, Mudra NPAs had increased to Rs 18,835 crore in FY20 in comparison to Rs 11,483 crore in FY19 and Rs 7,277 in FY18. Meanwhile, the share of bank credit to micro and small enterprises (MSEs) in the country’s overall gross bank credit had continued to decline for the fifth straight month in May this year. From 12.11 per cent in December 2020, the MSE share contracted to 12.09 per cent in January 2021, 11.8 per cent in February, 11.3 per cent in March, 9.7 per cent in April, and further to 9.48 per cent in May. The overall gross bank credit as of May 2021, stood at Rs 108.33 lakh crore, RBI’s July bulletin had showed.