Despite Covid-19 concerns in the last leg of the fiscal, the small business loans under the Pradhan Mantri Mudra Yojana (PMMY) surpassed last fiscal year’s figure.

In the financial year ended March 31, 2020, the total sanctioned amount was at ₹3,23, 574 crore as on March 27, compared to ₹3,21,723 crore registered during the financial year ended March 2019.

As per the latest government data, out of the sanctioned amount, ₹3.16 lakh crore was disbursed, as against the ₹3.11 lakh crore disbursed in the previous financial year.

“The total loans sanctioned would have touched ₹3.50 lakh crore, except for the lockdown due Covid-19 which began by the middle of last month, as last two months of a fiscal are generally crucial for any loans,’’ according to a top executive of erstwhile Andhra Bank, who is yet to given posting following bank’s merger with Union Bank from today.

The PMMY is a scheme of the Centre to provide loans of up to ₹10 lakh to non-corporate, non-farm small/micro enterprises. These loans are classified as Mudra loans .

These collateral-free loans come under three categories – Shishu (up to ₹50,000), Kishore (between ₹50,000 and ₹5 lakh) and Tarun (up to ₹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.

Slow start

The growth in Mudra loans in the first three quarters was so tardy that the Mudra offcials and the State Level Bankers’ Committees (SLBC) of different States had to take special measures to ramp up lending. There were also serious concerns about increasing quantum of non-performing assets (NPAs).

As on January 2020, the disbursal of Mudra loans sanctioned stood only at ₹1,97,816 crore. However, the sanctions surged from Feburay and about ₹1.25 lakh crore was given just in 45 days, taking into account the 15-day lockdown from mid-March.

A bulk of Mudra loans are under the Shishu category, with the majority of beneficiaries being women.