Banks have extended loans of Rs 18.6 trillion to about 34.4 crore beneficiaries so far under the Pradhan Mantri Mudra Yojana (PMMY), which completes seven years on Friday, finance minister Nirmala Sitharaman has said.
Under the scheme, meant primarily for budding and small entrepreneurs in the non-corporate and non-farm sectors, loans up to Rs 10 lakh are extended to a beneficiary at affordable rates.
Prime Minister Narendra Modi hailed the performance of the scheme.
Guided by the principle of funding the unfunded, the Mudra Yojana has “given an opportunity to countless Indians to showcase their entrepreneurial skills and become job creators”, Modi said.
Women make up over 68% of the Mudra account holders and 22% of the loans were disbursed to new entrepreneurs, Sitharaman said.
As many as 51% of total sanctioned loans have gone to beneficiaries in the SC/ST/ OBC categories, which suggests the scheme stands for social justice as well, the minister said.
The scheme was launched by the Prime Minister on April 8, 2015.
Although the pandemic has hit the pace of growth of Mudra loans, the disbursement has still remained well above the annual average of Rs 2.66 trillion until FY20.
In FY21, such loan disbursements stood at Rs 3.12 trillion and in FY22, these touched Rs 3.03 trillion.
Given that most of the Mudra loans are collateral-free, experts have warned of growing risks of deterioration of asset quality, although they also concede that the scheme has improved access to credit of people belonging to vulnerable sections.
Mudra loans are extended to three categories of borrowers — Sishu, Kishore and Tarun. Customers seeking loans up to Rs 50,000 come under the Sishu category; the Kishore category covers credit above Rs 50,000 and up to Rs 5 lakh; and the Traun category covers loan above Rs 5 lakh and up to Rs 10 lakh.