Banks have stepped up disbursal of loans under Pradhan Mantri Mudra Yojana (PMMY) in the last two months by disbursing more than ₹40,000 crore.

As on January 24, 2020, the disbursal of Mudra loans sanctioned stood at ₹1,97,816 crore, while the disbursed loan amount was ₹1,91,970 crore, according to government data.

At the end of November 2019, disbursal was only at ₹1.51-lakh crore, which means a little less than one-third of the total loans disbursed was done from December 2019 till date. “There has been a step-up in Mudra loans in the last two months.

“The State Level Bankers’ Committees (SLBC) across the country have also been following it up as the year is drawing to a close. Generally, the last months of a financial year will be good for disbursals as targets have to be met,” a senior official with a major public sector bank told BusinessLine .

However, it is likely that even at this pace, banks are unlikely to reach last year’s disbursal figure. A total amount of ₹3.21-lakh crore was disbursed under the scheme in 2018-19.

This must have also brought down the overall lending for Micro, Small and Medium Enterprises (MSMEs). As per Reserve Bank of India (RBI) data, the total lending to MSMEs in the current financial year has declined by 1 per cent till January 11.

PMMY is a scheme of the Centre, which was launched in April 2015, for providing loans up to ₹10 lakh to the non-corporate, non-farm small/micro enterprises. These loans are classified as MUDRA loans under PMMY.

These are collateral-free loans under three categories – Shishu (up to ₹50,000), Kishore (between ₹50,000 and ₹5 lakh) and Tarun (₹10 lakh). These loans are given by commercial banks, RRBs, small finance banks (SFBs), MFIs and NBFCs. Public sector banks, however, have been the major channels of distribution, with a lion’s share in the total disbursals since the beginning of the scheme.

However, with more than 21 crore loans worth about ₹11-lakh crore under the scheme since 2015, there have been growing concerns with the RBI cautioning banks on rising non-performing assets (NPAs).

Notably, it is the Shishu loan account that forms the highest chunk of NPAs.

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