Rising non-performing assets and increasing incidence of frauds, including the alleged misuse of loans, are casting a shadow over loans disbursed by the Micro Units Development and Refinance Agency (Mudra).
According to the latest data, the performance of the Centre’s flagship programme, which is intended to promote micro, small and medium enterprises (MSMEs), appears to have been hit by these concerns.
As on February 23, 2018, loans sanctioned under the Prime Minister’s Mudra Yojana (PMMY) during financial year 2017-18 stood at ₹1.81-lakh crore, of which, ₹1.75-lakh crore had been disbursed. However, PMMY’s target for the year is a huge ₹2.44-lakh crore. It was ₹1.80-lakh crore in financial year 2016-17.
Launched in April 2015, Mudra offers three categories of loans: Shishu (up to ₹50,000), Kishor (₹50,000-₹5 lakh), and Tarun (₹5 lakh-₹10 lakh).
Last year, banks accounted for nearly 40 per cent of the total disbursals under the scheme, and were instrumental in achieving the target.
But this year, things could be different. “Given the present scenario in the banking sector, it is unlikely that this year’s target could be met. However, efforts are being made to meet targets by all banks under different State Level Bankers’ Committees (SLBCs),” said a senior SBI official.
Mudra’s management has already taken up the matter with SLBCs; the issue was discussed at a recent meeting of the Andhra Pradesh committee.
Banks have been requested to speed up lending and achieve the target under the scheme. They, in turn, have advised lead district managers to review the PMMY’s implementation regularly.
Some structural issues may also have to be addressed, according to the feedback from some Mudra beneficiaries.
“I took a loan under Kishor two years ago. For expansion, I needed more working capital. Now, I have been told there is no provision for upgradation,” says M Padma, who runs a pencil manufacturing unit here.
As on March 31, 2017, Mudra had 193 partner institutions comprising 27 public sector banks, 18 private sector banks, 31 regional rural banks, 13 State cooperative urban banks, 73 microfinance institutions and 31 non-banking financial companies.