Microfinance institutions have disbursed about 35 per cent of total loans extended under the Micro Units Development and Refinance (MUDRA) Bank.

Since its launch in April 2015, total loan disbursement under the scheme, which was originally launched as Prime Minister’s Mudra Yojana (PMMY), has been about ₹1.43-lakh crore.

MUDRA offers three categories of loans: Shishu (covering loans up to ₹50,000); Kishor (loans above ₹50,000 and up to ₹5 lakh); and Tarun (above ₹5 lakh and up to ₹10 lakh).

The reach of MFIs and the last mile connectivity they enjoy in rural areas with women groups and other clients are some of the reasons for the significant disbursal of these loans by micro lenders, according to experts.

“The maturity of credit delivery models and the last mile connectivity are helping MFIs to play a significant role in promoting small entrepreneurs, especially among women,” S Dilli Raj, President, SKS Microfinance, told BusinessLine .

The uptake in distribution is also being driven by higher refinance availability. Till recently, there was limited scope for refinance but now MUDRA has become another major source of refinance along with Nabard, he said.

After State Bank of India and its associates, SKS had distributed the largest amount of about ₹11,856 crore last year out of the ₹44,026 crore extended by 39 NBFC-MFIs in the country. Janalakshmi Financial Services and Ujjivan Financial Services disbursed ₹10,596 crore and ₹3,968 crore, respectively.

Most of these were Sishu loans, which show that women were turning small entrepreneurs. A major chunk of about ₹65,000 crore was given to women out of the total amount in 2015-16 and till date in the current financial year.

Going by the repayment rate, the businesses set up with MUDRA loans appear to be up and running. “As far as loans given by MFIs are concerned, the repayment rate is above 99 per cent, which speaks of the health of this portfolio,” Dilli Raj said.

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