Lenders, including banks, non-banking finance companies (NBFCs) and microfinance institutions (MFIs), have sanctioned a total of 58.8 million of small-ticket MUDRA loans amounting to `4.32 trillion in FY23 (till March 24), provisional data released by the Union finance ministry showed Saturday — a sharp jump of 27% year-on-year. At the same time, the number of loans increased from 53.7 million to 58.8 million, a rise of 9%.
This slower growth in the number of loans vis-a-vis sanctions clearly indicates that loans in the higher categories (Kishore and Tarun) are on the rise.
MUDRA loans have been divided into three categories — Shishu loans of up to `50,000, Kishore loans above `50,000 and up to `5 lakh, and Tarun loans above Rs 5 lakh and up to `10 lakh. About 40% of the total loans sanctioned under the MUDRA scheme come under the Shishu category.
“About 68% of accounts under the scheme belong to women entrepreneurs and 51% of accounts belong to entrepreneurs of SC/ST and OBC categories. This demonstrates that easy availability of credit to budding entrepreneurs of the country has led to innovation and sustained increase in per capita income,” finance minister Nirmala Sitharaman said in the statement.
As per the data, a total of 408.2 million MUDRA loans amounting to Rs 23.2 trillion have been sanctioned by lenders since the inception of the scheme in April 2015.
Under the MUDRA scheme, a collateral-free loan of up to Rs 10 lakh is sanctioned to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.
“PM Mudra Yojana has played a vital role in funding the unfunded and ensuring a life of dignity as well as prosperity for countless Indians. Today, as we mark eight years of Mudra Yojana, I salute the entrepreneurial zeal of all those who benefitted from it and became wealth creators,” PM Narendra Modi tweeted on Saturday.
The target set for MUDRA loans growth by the Centre has been achieved in each fiscal since the inception of the scheme, the finance ministry said, with FY21 being the only exception on account of Covid-19.
Minister of state for finance Bhagwat Karad in December last year had informed Parliament that the total non-performing assets (NPAs) in MUDRA loans stood at 3.17% as of March 2022, Parliamentary records show. “Public sector banks (PSBs) have been advised from time to time to take proactive measures to contain NPAs. They have also been told to improve underwriting appraisal standards, make a granular analysis of MUDRA NPA accounts and initiate preventive measures,” Karad had said in his reply to a Parliament query.
Further, as per data released by Maharashtra state level bankers’ committee, over 5.2 million MUDRA loans amounting to `30,019 crore were taken in the state as of June 2022. Of the total, 16.32% turned into NPAs, the data showed.