Fraudsters now eyeing Mudra loans

• Follow

There is hardly a domain that is not tarnished by fraudsters and the latest one seems to be MUDRA loans, prompting the government to urge banks to freeze the accounts of companies and individuals who are found to be perpetrating fraud on unsuspecting loan applicants. The Economic Times has reported that these fraudsters operate under the garb of facilitators for these small loans to dupe customers.

The fraudsters typically promise fast approval and disbursal of these loans and a low interest rate. The Mudra loans constitute a scheme launched in April 2015. It was designed to make available loans up to Rs 10 lakh to small-micro businesses. These loans are disbursed through commercial banks, small finance banks, regional rural banks, microfinance institutions and even NBFCs.

Several cases of such frauds on people who are trying to develop small businesses have made the government sit up and urge banks to alert customers about such loan fraudsters lurking around the corner. The concerned institutions have also been asked to initiate action against such criminals in coordination with local authorities, said the report. They have also been directed to help the victim recover the money that they have been defrauded of.

“This scheme has gained good popularity among small-scale entrepreneurs, and on the pretext of faster approvals or lower interest rates, fraudsters dupe such unsuspecting borrowers. While banks could help with the awareness programme, it is also u to the borrowers to stay vigilant,” said a bank official who wished to remain anonymous. The official also cited the instance of a self-help group of 12 women who were defrauded of Rs 12 lakh by promising fast and efficient service.

Till July 21, 2023, Rs 107,714.45 crore has been sanctioned and Rs 102,527.09 crore was disbursed under this scheme. A total of Mudra 13,572,572 loans has been distributed so far to boost entrepreneurship at the grassroots level.

Apart from promoting entrepreneurship, the Mudra loans seem to be pushing the cause of empowerment of women and backward communities. Women account for 68% of the Mudra accounts, while 51% belong to the scheduled castes, scheduled tribes and other backward castes.

Incidentally, the non-performing assets under Mudra loans amounted to 3.17% of the credit disbursed till March 2022. The government takes great pride in this scheme with Union finance minister Nirmala Sitharaman recently saying that it has helped generate employment in big numbers apart from translating into gains for the economy. “This demonstrates that easy availability of credit to the budding entrepreneurs of the country has led to innovation and sustained increase in per capita income,” she remarked.