The disbursal of small business loans under Pradhan Mantri Mudra Yojana (PMMY) reached an all-time high at ₹3.39 lakh crore in the third quarter of the current financial year that ended December 2024.

“The performance of Mudra loans in the third quarter of FY surpassed its own record performance registered in the corresponding quarter of previous financial year,’‘ a senior Mudra official told businessline.

In the third quarter of last fiscal, disbursal of Mudra loans increased 16 per cent and reached ₹3 lakh crore mark, as per official data. A substantial part of growth came in the third quarter, the official said adding that in the first half of FY25, PMMY loans had actually showed a dip for the first time after  Covid-19 at ₹1,86,284 crore as of September 24, compared to ₹1,91,863 crore in the same period last year.

Lending institutions such as public sector banks, private sector banks, regional rural banks, small finance banks, micro-finance institutions (MFIs) and non-banking financial companies (NBFCs) together exceeded the annual targets set out by the Government of India under PMMY every year since its inception in the Union Budget for FY15-16.  

Mudra loans are given in three categories of Sishu (up to ₹50,000), Kishore (above ₹50,000 and up to ₹5 lakh) and Tarun (above ₹5 lakh and up to ₹10 lakh).

“From this financial year, for loanees with a good repayment history there is an increase of upper cap on Tarun loans to ₹20 lakh which can be given on the discretion of the banks. This has been the one of the driver for higher quantum of loans and also fostering discipline in the repayment of loans,’‘ a senior SBI official said.

SBI has a lion’s share in the distribution of PMMY loans.

Apart from their efforts to drive entrepreneurship, especially among women, banks of late are also ‘motivated’ to lend more in view of a gradual reduction in non-performing assets (NPAs), say bankers.

According to official data, aggregate NPAs of PMMY loans decreased from to 3.4 per cent in 2023-24 from 4.9 per cent in 2019-20.

Published on January 20, 2025