Credit and Finance for MSMEs: Prime Minister Narendra Modi’s Pradhan Mantri Mudra Yojana (PMMY) scheme to promote entrepreneurship and self-employment has disbursed 94 per cent of the loan amount sanctioned to micro and small enterprises (MSEs) as of February 26 in the current financial year. Out of the Rs 2.38-lakh-crore amount involved in 3.68 crore loans, Rs 2.24 crore was disbursed during the 11-month period of FY21, according to the scheme’s provisional data available on its portal. The disbursement rate for the previous financial years 2019-20 and 2018-19 stood at 97.6 per cent and 97 per cent respectively. Lending institutions including banks, non-banking financial companies, microfinance institutions, and others had disbursed Rs 329684.63 crore in FY20 and Rs 311811.38 crore in FY19. The scheme was launched by PM Modi in 2015.
PMMY offered up to Rs 50,000 worth of loan under Shishu cover, Rs 50,000 – 5 lakh loans under the Kishor cover, and Rs 5 lakh – Rs 10 lakh under the Tarun cover to non-corporate, non-farm MSEs. According to a Finance Ministry’s statement earlier last year, women entrepreneurs have reaped maximum benefits under the PMMY scheme as out of over Rs 22.53 crore loans sanctioned till January 31, 2020, over Rs 15.75 crore loans were extended to women. These women beneficiaries were 70 per cent of total borrowers. IndusInd Bank had a majority share of Rs 38,199 crore amount disbursed in FY20 followed by SBI with Rs 34,977 crore disbursed, Bandhan Bank disbursing Rs 14,755 crore, etc., according to the scheme’s data.
Meanwhile, gross bank credit deployed to micro and small enterprises (MSEs) in December 2020 had increased 6.6 per cent to Rs 11.31 lakh crore from Rs 10.61 lakh crore during the year-ago period. The December year-on-year (YoY) credit growth to MSEs was also up from 6.1 per cent YoY growth in November 2020, according to the data from the Reserve Bank of India (RBI). MSME sector had a share of around 18 per cent in the total credit to the industry and around 5 per cent in the total non-food credit extended by the scheduled commercial banks in November 2020, as per RBI data.