12-Dec-2022: More than 37.76 crore loans amounting to over Rs. 20.43 lakh crore disbursed since inception of Pradhan Mantri Mudra Yojana

As per data uploaded by the Pradhan Mantri Mudra Yojana (PMMY) by Member Lending Institutions (MLIs) on Mudra portal, as on 25.11.2022, more than 37.76 crore loans amounting to over Rs. 20.43 lakh crore have been disbursed since inception of the Scheme in April 2015.

Referring to a Ministry of Labour and Employment (MoLE) survey, the Minister stated that MoLE conducted a large sample survey at the national level to assess employment generation under PMMY. As per the survey results, PMMY helped in generating 1.12 crore net additional employment during a period of approximately 3 years (i.e. from 2015 to 2018). At an overall level, Shishu category of loan constitutes about 66% of share among additional employment generated by establishments owned by MUDRA beneficiaries followed by Kishore (19%) and Tarun (15%) categories respectively.

Giving more details about the scheme, the Minister stated that Under PMMY, collateral-free institutional credit up to Rs. 10 lakh is provided by Member Lending Institutions (MLIs) i.e. Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs). Any individual, who is otherwise eligible to take a loan and has a business plan for small business enterprise can avail loan under the Scheme. He/She can avail loans for income generating activities in the manufacturing, trading, services sector and also for activities allied to agriculture across three loan products, viz. Shishu (loans up to Rs. 50,000), Kishore (loans above Rs. 50,000 and up to Rs. 5 lakh) and Tarun (loans above Rs. 5 lakh and up to Rs. 10 lakh).

2-Aug-2022: Rs 9.98 lakh crore sanctioned to 16.67 crore loan accounts under Pradhan Mantri Mudra Yojana in 3 years

As per the extant guidelines, any individual who is otherwise eligible to take loan and has a business plan for non-farm income generating activities in sectors such as manufacturing, trading, services and activities allied to agriculture and whose credit need is up to Rs.10 lakh is eligible to avail credit under the Pradhan Mantri Mudra Yojana (PMMY).  This was stated by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha today.

The Minister stated that loans under the scheme are extended across three categories, viz. Shishu (loans up to Rs. 50,000), Kishore (loans above Rs. 50,000 and up to Rs. 5 lakh) and Tarun (loans above Rs. 5 lakh and up to Rs. 10 lakh).

Giving more detail of loans provided under the PMMY Scheme in the last three financial years, the Minister stated as below:-

The Minister further stated that the Ministry of Labour and Employment (MoLE) has conducted a sample survey at the national level to estimate employment generation under PMMY. As per the survey results, PMMY helped in generation of 1.12 crore net additional employment during a period of approximately 3 years (i.e. from 2015 to 2018).

As per findings of this survey, the Minister stated, on an overall basis, loans under Shishu category accounted for 66% of additional employment generated by establishments owned by MUDRA beneficiaries followed by Kishore (19%) and Tarun (15%) categories. Further, as on 01.07.2022, more than 7.66 crore loans amounting to Rs. 6.12 lakh crore have been extended to New Entrepreneurs/Accounts under PMMY, since inception of the Scheme. However, data on employment opportunities created under the PMMY Scheme is not Centrally maintained.

As per data uploaded by Member Lending Institutions (MLIs) on Mudra portal, the Minister gave details of category-wise number of PMMY loans extended across the country, as on 01.07.2022, is as follows:-

The Minister stated that as informed by Reserve Bank of India (RBI), 1,107 Centres for Financial Literacy (CFL) have been set up across the country as on 30.06.2022. These financial literacy centres inter-alia conduct training programmes to promote entrepreneurial skill among the rural people of the country. Further, to increase village level entrepreneurs, Banks through their Rural Self Employment Training Institutes (RSETIs) impart training with focus on skill upgradation and entrepreneurship development of rural youth.

In order to create livelihood avenues, the Minister stated that National Bank for Agriculture and Rural Development (NABARD), through its Micro Entrepreneurship Development Programmes (MEDPs) and Livelihood & Enterprise Development Programmes (LEDPs), has been promoting skill development for SHG members in rural areas. NABARD’s endeavor in skilling the SHG members through MEDPs/LEDPs is to enable SHG members starting micro enterprises in rural areas.

Further, to help the rural poor to set up enterprises at the village level in non-agricultural sectors, Start-up Village Entrepreneurship Programme (SVEP) is being implemented as a sub-scheme under Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM), the Minister stated.

8-Feb-2022: Rs. 3.22 lakh crore sanctioned under PMMY against target of Rs. 3.50 lakh crore in FY 2020-21

Under Pradhan Mantri Mudra Yojana (PMMY), the Government allocates annual targets for the amount to be sanctioned by more than 150 Member Lending Institutions (MLIs). This was stated by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha today.

The Minister stated that MLIs in turn fix their respective State-wise target according to potential of the area, their presence and other related parameters. Targets allocated to MLIs vis-à-vis achievements in FY 2020-21 are ANNEXED.

Responding to a question on targets of PMMY, the Minister stated that the national level targets under the scheme have been consistently met since inception of the scheme, except for FY 2020-21 due to COVID-19 pandemic. In FY 2020-21, an amount of Rs. 3.22 lakh crore was sanctioned under PMMY against the target of Rs. 3.50 lakh crore.

Under the Scheme, institutional credit up to Rs. 10 lakh is provided by MLIs to micro/small business units for income generating activities in manufacturing, trading, services sectors and also for activities allied to agriculture.

As per data uploaded by MLIs on Mudra portal, the Minister stated that as on 31.12.2021, over 32.53 crore loans involving a sanctioned amount of Rs. 17.32 lakh crore have been extended under PMMY, since its inception in April, 2015.

The Minister listed out a number of steps that have been taken by the Government to improve implementation of the Scheme, which, inter alia, include:

1. provision for online applications through psbloansin59minutes and Udyamimitra portal;
2. some of the Public Sector Banks (PSBs) have put in place end-to-end digital lending for automated sanctions under PMMY;
3. intensive publicity campaigns by PSBs and Mudra Ltd. for increased visibility of the Scheme amongst the stakeholders;
4. simplification of application forms;
5. nomination of Mudra Nodal Officers in Public Sector Banks (PSBs);
6. periodic monitoring of performance of PSBs with regard to PMMY etc.

The Minister also stated that as per Para no. 25 of RBI’s Master Circular no. RBI/2015-16/59 dated 01.07.2015 on ‘Customer Confidentiality Obligations’, banks are under obligation to maintain secrecy arising out of the contractual relationship between the banker and customer, and as such no information should be divulged to third parties, except under circumstances provided in the circular.

20-Dec-2021: 68% Pradhan Mantri Mudra Yojana accounts held by women entrepreneurs, availing 44% of sanctioned amount

Under Pradhan Mantri Mudra Yojana (PMMY), institutional credit up to Rs. 10 lakh is provided by Member Lending Institutions (MLIs) to micro/small entrepreneurs, including Women, for income generating activities in sectors such as manufacturing, trading, services and activities allied to agriculture.

The Minster stated that the Government allocates annual targets for the amount to be sanctioned under PMMY to MLIs i.e. Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs). For the current financial year (FY), a target of sanction of Rs. 3 lakh crore has been fixed for MLIs. State/UT-wise and Gender-wise targets are not allocated by Government under  PMMY.

Giving more details, the Minister stated that loans under the Scheme are extended by MLIs as per their commercial parameters, based on their Board-approved policy and extant Reserve Bank of India (RBI) guidelines which, inter-alia includes, viability of project, assessment of repayment capacity of the borrower etc. Any complaints received in respect of implementation of PMMY, including turning down of loan applications, are redressed in coordination with the respective banks.

The Minister listed a number of steps that have been taken to improve implementation of the Scheme which inter alia, include:

1. handholding support for facilitating submission of loan applications;
2. provision for online applications through psbloansin59minutes and Udyam Mitra portal;
3. intensive publicity campaigns for increased visibility of the scheme amongst the stakeholders;
4. simplification of application forms;
5. nomination of Mudra Nodal Officers in Public Sector Banks (PSBs);
6. periodic monitoring of performance of PSBs with regard to PMMY etc.

7-Apr-2021: More than 28.68 crore loans for an amount of Rs 14.96 lakh crore sanctioned by Banks, NBFCs and MFIs since launch of the PMMY

Ministry of Finance is committed to provide financial inclusiveness and support to the marginalized and hitherto socio-economically neglected classes. Financial needs of all stakeholders ranging from the budding entrepreneurs to the hard-working farmers has also been catered to through various initiatives. A key initiative towards this is Pradhan Mantri MUDRA Yojana (PMMY), which has given wings to the dreams and aspirations of millions, along with a feeling of self-worth and independence.

PMMY was launched by the Hon’ble Prime Minister on April 8, 2015 for providing loans upto Rs.10 Lakh to the non-corporate, non-farm small/micro enterprises. As we are celebrating the sixth anniversary of PMMY, we take look at the major aspects of this Scheme and its achievements so far.

Why MUDRA Yojana?

India is a young country brimming with youthful enthusiasm and aspirations. In order to provide a fertile ground for sowing the seeds of India’s development it is very important to harness this innovative zeal of young India which can provide new age solutions to existing gaps in the economic ecosystem of the country. Understanding the need to harness the latent potential of entrepreneurship in India, the NDA Government in the very first budget launched the Pradhan Mantri MUDRA Yojana.

How does MUDRA Yojana work?

Under PMMY collateral free loans of upto Rs. 10 Lakh are extended by Member Lending Institutions (MLIs) viz Scheduled Commercial Banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs), Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) etc.

The loans are given for income generating activities in manufacturing, trading and services sectors and for activities allied to agriculture.

Mudra loans are offered in three categories namely, ‘Shishu’, ‘Kishore’ and ‘Tarun’ which signifies the stage of growth or development and funding needs of the borrowers:-

• Shishu : covering loans upto  Rs. 50,000/-
• Kishore : covering loans above  Rs. 50,000/- and upto Rs. 5 lakh
• Tarun : covering loans above  Rs. 5 lakh and upto Rs. 10 lakh

With an objective to promote entrepreneurship among the new generation aspiring youth, it is ensured that more focus is given to Shishu Category loans and then Kishore and Tarun categories.

Achievements of this Scheme (As on 19.03.2021)

• More than 28.68 crore loans for an amount of Rs 14.96 lakh crore have been sanctioned since launch of the scheme (as on 19.03.2021)
• 4.20 crore PMMY loans sanctioned in 2020-21 and Rs. 2.66 lakh Crore sanctioned in FY 2020-21  (As on 19.03.2021)
• The average ticket size of the loans is about Rs 52,000/-
• 88% of the loans are of ‘SHISHU’ category
• Almost 24% of the loans have been given to New entrepreneurs
• About 68% of the loans have been given to women entrepreneurs
• About 51% of the loans loan have been given to SC/ST/OBC borrowers.
• SCs and STs constitute 22.53 % of the borrowers
• OBCs constitute 28.42% of the borrowers
• About 11% of the loans have been given to Minority community borrowers.
• As per a survey conducted by Ministry of Labour and Employment, PMMY helped in generation of 1.12 crore net additional employment from 2015 to 2018.  Out of the 1.12 crore of estimated increase in employment, Women accounted for 69 lakh (62%).

24-Jun-2020: 2% Interest Subvention approved on prompt repayment of Shishu Loans under Pradhan Mantri MUDRA Yojana for a period of 12 months

Union Cabinet chaired by Prime Minister Shri Narendra Modi today approved a scheme for interest subvention of 2% for a period of 12 months, to all Shishu loan accounts under Pradhan Mantri Mudra Yojana (PMMY) to eligible borrowers.

The scheme will be extended to loans which meet the following criteria - outstanding as on 31st March, 2020; and not in Non-Performing Asset (NPA) category, as per Reserve Bank of India (RBI) guidelines, on 31st March 2020 and during the period of operation of the Scheme.

The interest subvention would be payable for the months in which the accounts are not in NPA category including for the months that the account becomes a performing asset again, after turning NPA. The scheme will incentivize people who will make regular repayments of loans.

The estimated cost of the Scheme would be approximately Rs. 1,542 crore which would be provided by the Government of India.

Background: This Scheme is for implementation of one of the measures relating to MSMEs, announced under the Aatma Nirbhar Bharat Abhiyan. Under PMMY, loans for income generating activities up to Rs. 50,000 are termed as Shishu loans. PMMY loans are extended by Member Lending Institutions viz. Scheduled Commercial Banks, Non-Banking Finance Companies and Micro Financial Institutions, registered with Mudra Ltd.

The ongoing COVID-19 crisis and the consequent lockdown has led to severe disruption of business for micro and small enterprises which are funded through Shishu Mudra loans. Small businesses typically function on thin operating margins, and the current lockdown has had a severe impact on their cash flows, jeopardizing their ability to service their loans. This could lead to default in repayment and have a resultant impact on access to institutional credit in future.

As on 31st March 2020, about 9.37 crore loan accounts under the Shishu category of PMMY with a total loan amount of about Rs 1.62 Lakh crore, were outstanding.

Implementation strategy

The Scheme will be implemented through the Small Industries Development Bank of India (SIDBI) and will be in operation for 12 months.

For borrowers, who have been allowed a moratorium by their respective lenders, as permitted by RBI under the ‘COVID 19 Regulatory Package’, the Scheme would commence post completion of the moratorium period till a period of 12 months i.e. from September 01, 2020 till August 31, 2021. For other borrowers, the scheme would commence w.e.f. June 01, 2020 till May 31, 2021.

Major Impact

The Scheme has been formulated as a specific response to an unprecedented situation and aims to alleviate financial stress for borrowers at the ‘bottom of the pyramid’ by reducing their cost of credit. The Scheme is expected to provide much needed relief to the sector, thereby enabling small businesses to continue functioning without laying off employees due to lack of funds.

By supporting small businesses to continue functioning during these times of crisis, the Scheme is also expected to have a positive impact on the economy and support its revival, which is necessary for employment generation in future.

11-Feb-2020: Loans extended to women under Pradhan Mantri Mudra Yojana

As on 31.01.2020, over 15 crore loans have been disbursed to women borrowers, since inception of the scheme, amounting to Rs 4.78 lakh crore under Pradhan Mantri Mudra Yojana (PMMY).

Giving more details, Shri Thakur said that under PMMY, loans are extended to eligible borrowers for manufacturing, processing, trading, services and activities allied to agriculture, which help in creating income generating activities and employment. However, profession-wise details are not maintained centrally.

14-Jan-2019: Banks to review mudra loan book

The finance ministry has asked the banks to review all loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY or Mudra loan scheme), as the non-performing assets (NPA) have crossed Rs 11,000 crore within three years of the launch of the scheme.

The RBI has already flagged its concerns regarding the bad loans to the government. As per the government’s own admission, the total disbursements under the scheme stood at Rs 2.53 lakh crore in financial year (FY) 2017-18 as compared to Rs 1.80 lakh crore in FY 2016-17 and Rs 1.37 lakh crore in FY16. More than 4.81 crore micro borrowers have benefited from PMMY during FY 2017-18 and a majority of them has been women and those from weaker sections of the society. Under the scheme launched on April 8, 2015, banks are required to finance micro and small entrepreneurs for up to`10 lakh. Loans can be granted under three categories: up to `50,000 under ‘Shishu’, `50,001-`5 lakh under ‘Kishore’ and `5,00,001-`10 lakh under ‘Tarun’ categories. The interest rates on these loans are in the 8-12 per cent range.

However, to push the scheme, there had been overemphasis on the banks to meet loan disbursal targets. In the race to meet the target, the credentials of loan-seekers were not being properly verified and in many instances, loans were being given without any collateral or security, making it difficult for banks to go after defaulters.

Apart from Public Sector Banks (PSB), Mudra loans are disbursed also by private banks, microfinance institutions and other Member Lending Institutions. As per the PMMY annual report for 2017-18, NBFCs sanctioned over `27,000 crore of Mudra loans in FY18, three times their target of `9,050 crore. According to a Lok Sabha reply, over 3 crore loans amounting to `1.44 lakh crore have been extended by private sector banks as on December 21, 2018, since the inception of the scheme. The Mudra loan NPAs of PSBs rose from `3,790.35 crore in March 31, 2017, to `7,277.31 crore in March 31, 2018.

What went wrong?

In order to push the scheme, there had been an overemphasis on banks to meet loan disbursal targets. In the race to meet the target, the credentials of loan-seekers were not being properly verified and in many instances, loans were being given without any collateral or security, making it difficult for the banks to go after defaulters.

22-Nov-2018: NBFC Mudra loans grew faster than banks in FY18

According to the 2017-18 annual report of Pradhan Mantri Mudra Yojana (PMMY), though NBFCs sanctioned only over ₹ 27,000 crore of Mudra loans in FY18 against ₹ 92,492.68 crore by public sector banks, their year-on-year growth was faster. While NBFC Mudra loan sanctions increased ₹ 21,562.63 crore from a year ago, state-run banks could raise their Mudra loans by only ₹ 20,539.01 crore in the same period.

Impressively, NBFCs not only met their Mudra target of ₹ 9,050 crore for FY18, but their sanctions for the year were a five-fold jump from the previous year.

PMMY is a scheme launched in April 2015 for providing loans up to ₹ 10 lakh to non-corporate, non-farm small/micro enterprises. These advances are classified as Mudra loans and given by commercial banks, regional rural banks (RRBs), small finance banks, cooperative banks, micro finance institutions (MFIs) and NBFCs.

The data showed that lenders overall have classified ₹ 2.44 trillion loans under PMMY, a growth of 41% y-o-y. The other category of lenders—small finance banks (SFBs)—has also seen robust growth at 183% y-o-y to ₹ 19,022.89 crore. AU Small Finance Bank was the top institution among SFBs with a sanction amount of ₹ 4,614.4 crore to 117,000 borrowers.

Among state-run banks, State Bank of India (SBI) with ₹ 28,791 crore sanctions to 1.41 million accounts came first. It was followed by Canara Bank and Punjab National Bank (PNB) with ₹ 7,665 crore and ₹ 6,838 crore, respectively.

While NBFCs were facing a liquidity crunch after defaults by IL&FS and the subsequent investor reluctance, experts believe that lending under the PMMY scheme will largely remain unaffected.

The annual report pointed out that there are 57.7 million small businesses and micro units in India and a majority of them are owned by people belonging to scheduled caste, scheduled tribe or other backward classes. Of these, only less than 5% have access to formal credit institutions and the rest have to rely upon informal sources for funding their business (friends, relatives or money lenders).

13-Apr-2017: Pradhan Mantri Mudra Yojana (PMMY) crosses the target of Rs. 1.8 lakh crore for 2016-17

Number of borrowers well over 4 crore this year including more than 70% women borrowers

Loans extended under the Pradhan Mantri Mudra Yojana (PMMY) during 2016-17 have crossed the target of Rs. 1,80,000 crore for 2016-17. Sanctions currently stand at Rs. 1,80,087 crore with final data still awaited from some of the smaller non-banking lenders. Of this amount, Rs. 1,23,000 crore was lent by banks while non-banking institutions lent about Rs. 57,000 crore. Data compiled so far indicates that the number of borrowers this year were over 4 crore, of which over 70% were women borrowers. About 20% of the borrowers were from the Scheduled Caste Category, 5% from the Scheduled Tribe Category, while Other Backward Classes accounted for almost 35% of the borrowers.

The achievements of both public sector banks and private banks have been extremely encouraging. The robust growth in bank loans to unfunded and underfunded segments is an indication of the emergence of this category of borrowers as a key driver of demand for credit.

The Union Budget has announced a target of Rs. 2.44 lakh crore for Mudra Loans during 2017-18. There would be a special focus within the Mudra Scheme on convergence with other government schemes, deepening connect with borrowers and meeting credit requirements of trainees completing skilling course.

Mudra Loans are available for non-agricultural activities up to Rs. 10 lakh and activities allied to agriculture such as Dairy, Poultry, Bee Keeping etc., are also covered. Mudra’s unique features include a Mudra Card which permits access to Working Capital through ATMs and Card Machines. Evaluation studies show that banks have been proactive in identifying and disbursing loans to first time borrowers thereby weaning them away from money lenders. Borrowers particularly value three attributes of Mudra Loans viz, non-insistence on guarantor or collateral, simple documentation and quick processing.