Government’s micro-credit scheme for MSMEs overachieves target for second consecutive year
- IBEF
- August 1, 2023
According to the Minister of State in the Finance Ministry, Mr. Bhagwat Karad, the national level loan target under the Pradhan Mantri Mudra Yojana (PMMY) has been exceeded in the financial year 2022-23 for the second consecutive year after it was missed during the Covid year of 2020-21.
Mr. Bhagwat Karad explained that "While the government allocates annual targets to Member Lending Institutions (MLIs), the latter set their respective state-wide targets based on the potential of the area, their presence, and other related parameters". MLIs include commercial banks, regional rural banks, small finance banks, microfinance institutions, and non-banking financial businesses (NBFCs).
In FY23, US$ 55.58 billion (Rs. 4.56 lakh crore) was sanctioned under 6.2 crore Mudra loans to non-corporate and non-farm micro and small enterprises (MSEs) against a target of US$ 48.75 billion (Rs. 4 lakh crore), while in FY22, US$ 41.32 billion (Rs. 3.39 lakh crore) was sanctioned under 5.3 crore loans against a target of US$ 36.56 billion (Rs. 3 lakh crore).
However, in FY21, US$ 39.12 billion (Rs. 3.21 lakh crore) was sanctioned under 5 crore loans against a target of US$ 42.66 billion (Rs. 3.50 lakh crore), while pre-Covid, during FY20, US$ 41.07 billion (Rs. 3.37 lakh crore) was sanctioned under 6.2 crore loans, exceeding the set target of US$ 39.61 billion (Rs. 3.25 lakh crore), according to Mudra portal data.
Out of the sanctioned sum, US$ 54.85 billion (Rs. 4.5 lakh crore) was distributed in FY23, US$ 40.34 billion (Rs. 3.31 lakh crore) in FY22, US$ 37.90 billion (Rs. 3.11 lakh crore) in FY21, and US$ 40.10 billion (Rs. 3.29 lakh crore) in FY20. In the current fiscal year, 1.35 lakh crore loans totalling US$ 13.04 billion (Rs. 1.07 lakh crore) were approved till July 21, 2023, out of which US$ 12.43 billion (Rs. 1.02 lakh crore) loans were disbursed.
Since the program's inception on April 8, 2015, more than 42.20 billion loans totalling US$ 296.68 billion (Rs. 24.34 lakh crore) have been approved to borrowers nationwide.
The government established the scheme to refinance all last-mile financiers in the field of financing to micro and small firms in manufacturing, trading, and services, as well as agri-allied activities. Mudra provides loans for micro units to help them grow at three stages: Shishu, Kishor, and Tarun, with financial limits ranging from US$ 609.47 (Rs. 50,000) to US$ 6,094.70 (Rs. 5 lakh) and US$ 6,094.70 (Rs. 5 lakh) to US$ 12,189.40 (Rs. 10 lakh), respectively.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Partners
