The disbursal of Pradhan Mantri Mudra Yojana (PMMY) loans increased 23 per cent to ₹81,597 crore in the first quarter of FY24, compared to ₹62,650 crore in the same quarter last year. 

“This is the highest-ever increase in disbursals in the first quarter since the launch of the scheme, driven by increased demand for the Tarun category of loans due to upgradation from the first category of Sishu loans, among other factors,’‘ a senior Mudra official told businessline.  In the comparable period of FY22, the disbursal was at about ₹37,600 crore.

Mudra loans are extended in three categories — Shishu (up to ₹50,000); Kishor (above ₹50,000 and up to ₹5 lakh); and Tarun (above ₹5 lakh and up to ₹10 lakh). 

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In the last financial year ended March 2023, the disbursements of small business loans Yojana (PMMY) registered an all time high at ₹4.50-lakh crore, marking a 34.7 per cent growth over the previous year’s ₹31-lakh crore. According to a senior SBI official, there has been an increase in average size Mudra loans, which was at ₹73,489 in FY23.

“Due to increased economic activity in rural- and semi-urban areas and better demand projections, existing customers are preferring to upgrade while there is also a demand from first time customers. However, this pace of growth can lead to sudden spurt in NPAs,’‘ said the official.

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”Higher disbursement growth in comparison to sanctions indicates borrowers’ improved willingness for credit utilisation. The ratio of disbursed to sanctioned amount also hit an all-time high of 99 per cent in FY23, showing borrowers’ readiness to use the sanctioned funds,’‘ said Bibekananda Panda, Senior Economist, State Bank of India.

Total disbursal of Mudra advances stood ₹3.31-lakh crore, ₹3.11-lakh crore and ₹3.29-lakh crore in FY22, FY21 and FY20, respectively.