Notwithstanding the severe second wave of Covid-19, disbursal of petty business loans under Pradhan Mantri Mudra Yojana (PMMY) has picked up in the first quarter of the current financial year compared to the same period last year.

As on July 2, loans worth ₹37,601 crore have been disbursed against a total sanctioned amount of ₹41,516 crore, according to data available with Mudra.

“The disbursals in the first quarter of FY22 were higher by about ₹4,000 crore compared to the first quarter of FY,’’ a senior official of Mudra told BusinessLine .

“Though the second wave of the pandemic in the first quarter was more severe than last year, the lockdowns were scattered in different States and there was no national lockdown. Even bank employees braved Covid and continued to work. All this drove growth in disbursal of Mudra loans,’’ a senior official of State Bank of India told BusinessLine .

Three categories

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.

Bankers expect the growth in PMMY loans to gain pace further in the remaining quarters with the second wave of covid coming under control now.

Last financial year was challenging for the small business loans. The loans dropped to ₹2,79,481 crore from ₹3,37,495 crore in the financial year 2019-20.

However, there is no complete data on the state of non-performing assets (NPAs) in the segment and among banks.

Mudra loans are given by commercial banks, regional rural banks, small finance banks, MFI and NBFCs. The public sector banks, however, have been the main channel and account for over 60 per cent of the loans disbursed.

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