The entrepreneurship streak appears to be stronger in the small retail business space, going by the pattern of loans disbursed by the Micro Units Development and Refinance (MUDRA) Bank.

Small retailers, shopkeepers and those running micro units have utilised almost half of the loans disbursed under the MUDRA scheme launched by the Centre in April 2015.

As of May 20, the total loan disbursement was about ₹1.43 lakh crore and new entrepreneurs accounted for much of it.

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 objective of the scheme is to encourage new small businesses and ensure that at least 60 per cent of the credit flows to Shishu category units and the balance to the Kishor and Tarun categories. This has been realised as loans sanctioned/disbursed under the first category have so far have been higher than those under the other two categories.

According to a senior official at the State Bank of India, the demand for loans has been more from those taking up , among others, transport and community/personal service businesses.

In terms of States’ performance, Karnataka topped last year with ₹16,469 crore disbursements, followed by Tamil Nadu (₹15,496 crore) and Maharashtra (₹13,372 crore).

In disbursals, State Bank of India and its associate banks accounted for the biggest share of ₹16,999 crore. The disbursals by the 39 NBFC-Microfinance Institutions were also significant at ₹44,026 crore.

MUDRA loans are cheaper than those offered by other agencies, such as banks and MFIs. The cost of MUDRA funds, on an average, is 150-200 basis points lower than the benchmark repo rate.

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