The average ticket size of loans under Pradhan Mantri Mudra Yojana (PMMY/MUDRA) has nearly doubled to ₹72,000 in FY23 from ₹38,000 in FY16, according to State Bank of India’s economic research department.

In eight years, MUDRA has brought forth a “leap of faith”, inculcating robust credit dispensation among MLIs (Member Lending Institutions) while fostering superior credit culture among diversified credit seeker groups, chiefly from the bottom strata that had remained unserved for a long time, said Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI.

Credit saturation of hitherto ‘thin credit file’ customers with little or NIL credit history has provided a credible data moat to lenders and policy makers, enabling them to craft better calibrated financial offerings to vulnerable groups, per a report by SBI’s ERD.

The amount of loans disbursed under MUDRA rose to ₹4.50 lakh crore in FY23 against ₹1.33 lakh crore in FY16. The number of loans sanction in FY23 stood at ₹6.23 crore against ₹3.48 crore in FY16, per PMMY data.

About PMMY loans

PMMY, under the Micro Units Development and Refinancing Agency (MUDRA), is a relatively new institution set up by the Government for development and refinancing activities relating to micro units.

The Yojana ensures collateral-free institutional credit up to ₹10 lakh is provided by Member Lending Institutions (MLIs) -- Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs).

Under the scheme, three categories of interventions have been formulated -- Shishu (loan up to ₹50,000), Kishore (loan ranging from ₹50,000 to ₹5 lakh), and Tarun (loan above ₹5 lakh and below ₹10 lakh).

Loans under PMMY are guaranteed by Credit Guarantee Fund for Micro Units (CGFMU). It provides Portfolio-level guarantee against default

Referring to total disbursements under the scheme since its launch, SBI’s ERD said this showcases that PMMY has been well received by diversified intended beneficiary classes -- Women, Minorities, Scheduled Castes (SCs), Scheduled Tribes (STs), and Other Backward Castes (OBCs), raising the economic clout of the bottom and ensuring equitable redistribution of resources and efficiently embedding resultant prosperity uniformly.

“While average ticket size has nearly doubled, there are encouraging trends being seen in disbursal of Tarun and Kishore variant with higher loan limits addressing the ‘Missing Middle problem’ in enterprises growth.

“Also, the portfolio has been well balanced across retail trade, services, and manufacturing and process is geared towards operational excellence through digitalisation of journey at both Pre and Post disbursal stage at MLIs end,” Ghosh said.

Social Fabric Index (SFI)

The ERD said India’s Social Fabric Index/SFI, representing the participation of the underprivileged in the formal banking system shows 3.2 times jump from 0.813 in FY17 to 2.640 in FY22.

The SFI, constructed by SBI using principal component analysis, includes three variables -- SC, ST, OBCs Mudra Accounts and Disbursements; number of women deposit accounts and deposits held in them; and Revenue and Capital Expenditure of Govt towards welfare of SC, ST, and OBCs.

Mudra Atmanirbhar Quotient /MAQ

MAQ, which measures the propensity of particular social strata to repay based purely on cash flow generated from business, has jumped up to 25 times since FY16 signifying the increasing atmanirbharta (self-reliance) of entrepreneurs across India’s social strata, the ERD said.

This quotient has increased from 0.81 for SC and ST social groups in FY16 to 2.20 and 2.02 respectively in FY22, showing marked improvement in efficient funds utilization and ensuing better repayment capacities, according to the report.

For OBCs, MAQ has increased from 0.82 in FY16 to 1.98 in FY22. For Minorities, it has increased from 0.99 in FY16 to 2.71 in FY22. For Women entrepreneurs, it has increased from 0.82 in FY16 to 2.28 in FY22, the report said.

MAQ for New Entrepreneurs has increased from 1.17 in FY16 to 3.54 in FY22. For Mudra Cards, it has increased highest from 0.67 in FY16 to 16.98 in FY22.

For NULM (National Urban Livelihood Mission) and NRLM (National Rural Livelihood Mission), MAQ has increased from 1.25 and 1.41 in FY17 to 10.30 and 10.53, respectively, in FY22.

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