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In what can be seen as a boost to economic activity, small business loans being extended under the Pradhan Mantri Mudra Yojana (PMMY) has gained traction in the first half of the current fiscal compared to full fiscal last year.
According to the latest data available, ₹1,17,332 crore has been disbursed as on October 15. In the corresponding period of the previous fiscal which had witnessed the first wave of Covid-19 and lock down, this was around ₹85,000 crore. The performance of Mudra loans during the first half of FY22 was significant because it showed a trend of normalisation after an adverse impact of Covid-19.
“The disbursal in the year so far is little less than what was disbursed in the first nine months of last financial year which was at about ₹1.21 crore as on December 2020. So, the quantum of petty loans disbursed in the first nine months of last fiscal has already been achieved in the first six months of the current financial year,” a senior SBI official said.
‘In revival mode’
According to an economist with a leading private bank, the rural economy is in the ‘revival mode’ and there has been increasing interest in setting up new small businesses. “While public sector banks are actively lending under Mudra scheme, many private sector banks are still cautious and are preferring to meet priority sector lending norms rather than being bullish on this segment,” he added.
An analysis of the trajectory of PMMY performance shows that total disbursals in 2020-21 declined to ₹3.11 lakh crore as against ₹3.29 lakh crore in the previous year. But things are turning ‘positive’ again this year, say bankers.
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). Among the three categories, Shishu loans have a lion’s share in the total loans at about 48 per cent.
However, there is a grey area as far as Non-Performing Assets (NPAs) are concerned as banks are yet to come out with the quantum of NPAs in the segment. Many petty businesses have been shut down in the last one-and-a -half year which impacted loan repayments which are being examined by banks, say sources.
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