In what can be seen as a New Year cheer for petty businesses, loans under Pradhan Mantri Mudra Yojana (PMMY) has reached an all-time high of ₹3-lakh crore in December 2023, registering 16 per cent year-on-year growth.

“The loans sanctioned now stand at ₹2,99,457 crore a week before the end of the third quarter of the current financial year on December 22, 2023 against ₹2.58-lakh crore in the same period in previous fiscal. As per the provisional figures, this has already crossed ₹3-lakh crore by December 29,’‘ a senior official of Mudra told businessline.

As per government data, women applicants have been the driving force for growth in the Mudra loans. About 70 per cent of the loans have been sanctioned to women and 25 per cent of them have been given to first time petty entrepreneurs.

“One of recent SBI Research reports suggests that there are encouraging trends in the in disbursal of Tarun and Kishor category loans with higher loan limits addressing the ‘missing middle problem’ in enterprises growth,’’ a senior SBI official said.

Also, the portfolio has been well balanced across retail trade, services and manufacturing and process is geared towards operational excellence through digitalisation of journey at both pre and post disbursal stages, he added.

Is this exposure safe for banks?

According to B Yerram Raju, an economist, banks are spared of any adverse results of loaning either due to lack of due diligence or monitoring. “Further, these are all fully guaranteed. They are all system driven and entrepreneur driven. Engagement with entrepreneurs pre and post Mudra loan disbursement is almost nil,’’ he added.

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