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Since 2017-18, loans disbursed under MUDRA always crossed the Rs 2.4 lakh crore-mark.

PM MUDRA (Micro Units Development and Refinance Agency) loans were introduced by central government in 2015 to expedite the grassroots-level entrepreneurship and self-employment in the country. But loan disbursements have dropped in the first six months of fiscal year 2021-22. Till fiscal year 2020-21, total disbursement stood at Rs 16 lakh crore, according to the data on MUDRA website.

Disbursements down drastically

According to the data, total loans sanctioned in fiscal year 2021-22 stood at Rs 1.07 lakh crore until September 30, of which Rs 1.01 lakh crore has been disbursed so far.

If this pace continue till the end of the fiscal year then maximum loan amount would be disbursed might hardly cross Rs 2.4 lakh crore.  Since 2017-18 the loan disbursed under MUDRA always crossed Rs 2.4 lakh crore marks.

If we consider the last year figure of Rs 3.11 lakh crore, then the average disbursement were Rs 1.55 lakh crore for first six months.

But in the current fiscal the disbursement figure touches only Rs 1.01 lakh crore, drops more than 50%.

“The figures are not very promising, that is true. The second wave of covid pandemic had a great impact on our economy so as on MUDRA loan figure. Hope in coming six months the trend would take 180 degree ‘U’ turn and suppress the previous figures.” said Subhasish Roy, DDG, MCC chamber of commerce of industry.

In the first six months, i.e. from April 1 to September 30 total 1.9 crore loans were sanctioned amounting Rs 1.07 lakh crore, of which Rs 1.01 lakh crore has been disbursed. The average ticket size of the sanctioned loan is approximately Rs 56,315 crore.

Previous year figures

MUDRA was launched in 2015 by PM Narendra Modi with a dream of making more and more small entrepreneurs in India. Since then, the loan disbursement amount has steadily gone up. FY21 was the first year when the figure suffered a dip by over 6 % and experts feel in FY22, the figure will again down by at least 35%, if not more.

Data on MUDRA website shows that in FY21, disbursements stood at Rs 3.11 lakh crore, down from Rs 3.31 lakh crore in FY20. In FY19, an amount of Rs 3.11 lakh crore and in FY18 Rs 2.47 lakh crore was disbursed.

Since FY16, MUDRA loans witnessed a sharp increase of 32%, 41%, 27% and 6% in the next four financial years respectively. The total disbursement so far has reached close to Rs 16 lakh crore.

After the second wave, the government is planning to make MUDRA loans more robust and accessible to the common people by reducing interest rate.

“We are considering extending the 2% interest subsidy to the immediate repayment of Shishu loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY),” a government official told in mid June, 2021.

There are three categories of loans under the MUDRA scheme. The smallest one titled “Sishu” entitles one to a loan of Rs 50,000. The next level of loan is between Rs 50,000 to Rs 5 lakh and is called “Kishore”, the third category called “Tarun” is from Rs 5 lakh to Rs 10 lakh.

The loanee does not need to submit collaterals for these loans. The annual rate of interest varies from 8.2% to 9.65%. The government is planning to reduce it to 6% but yet to take the decision.

Bottom line

“The impact of the pandemic was clear in the disbursement figure of first six months of current fiscal year. But we hope that with the growth in the economy, disbursement will surely pick up in the next six months. The first six month’s trend proves that there is reason for hope,” said Subhasish Roy of MCC Chambers of Commerce.

“We are hoping for a good year ahead. Hope the loss we faced in FY21 and in the first half of FY22 can be covered up in the next six months,” said an official requesting anonymity.