Small business loans under the Pradhan Mantri Mudra Yojana (PMMY) are back on track with disbursals surpassing even pre-Covid level.
Banks and other agencies have disbursed ₹1.58-lakh crore so far in the current financial year, much higher than the ₹1.21-lakh crore extended in the same period last year hit by the Covid pandemic, and also topped the pre-Covid year (April-December 2019), disbursals of ₹1.51-lakh crore.
“Apparently, there has been greater traction in the segment in the current financial year due to normalisation of economic activity, especially during the last three months,” a field General Manager of a public sector bank told
Sishu loans lead
Mudra loans are extended in three categories — Shishu (up to ₹50,000), Kishor from ₹50,000 to ₹5 lakh) and Tarun (from ₹5 lakh to ₹ 10 lakh). Shishu loans account for the lion’s share of the total disbursal at about 48 per cent.
According to a State Bank of India official, there was spurt in the demand for Sishu loans in recent months; this category now comes with 2 per cent interest subvention, announced by the Centre as part of the Covid-19 relief package.
Mudra has also extended the last date for submission of final claims for the 2 per cent Interest Subvention Scheme (ISS) till December 31, 2021. Thereafter, “the PMMY portal will be closed for submission of claims under ISS,’’ it said in a notification.
Surge seen in FY22
Going by this pace of growth, bankers expect the overall performance of Mudra loans to be significantly higher this financial year.
The trends in disbursal in recent years show a jump in the last three-four months of the fiscal. More than half the total loans were disbursed in the last four months of FY19, FY20 and FY21.
In terms of overall performance, Mudra sanctions during FY21 were lower at ₹3,21,759 crore against ₹3,37,495 crore in FY20 mainly due to the impact of lockdowns and a slowing of economic activity. In FY19, ₹3,21,722-crore loans were extended to petty businesses. According to latest data, sanctions in FY20 totalled ₹3,37,495 crore, up 5 per cent over FY19.