Hyderabad, April 8 Small business loans under the Pradhan Mantri Mudra Yojana (PMMY) witnessed record growth in disbursals in FY24 and also crossed the milestone of ₹5 lakh crore, according to the latest Government data. 

Loans sanctioned in the last financial year were higher at ₹5.28 lakh crore. The total disbursals stood at ₹5.20 lakh in the year ended March 2024, as against ₹4.40 lakh crore in the previous financial year. Nearly 70 per cent of the beneficiaries of these loans are women.

“With this, approximately ₹46 lakh crore has been disbursed in Mudra loans since the introduction of the scheme in 2015, if we include the provisional figures for FY24,’‘ a senior Mudra official told businessline.

The growth is driven by a variety of factors. “Lower delinquency rate in this segment is motivating public sector banks (PSBs) to further boost loan growth. PSBs are diligently monitoring fund utilisation through consistent follow-ups and frequent customer interactions,’‘ Bibekananda Panda, Senior Economist, State Bank of India (SBI) told businessline.

According to a senior Mudra official, there is also an institutional framework that encourages lenders to push disbursal of Mudra loans further, such as the guarantee provided by the National Credit Guarantee Trustee Company Ltd. (NCGTC) against the eligible micro units under PMMY.

“A new trend is scaling of existing customers to higher category loans, which show their businesses are being stabilised. 

Mudra loans are extended in three categories — Shishu (up to ₹50,000), Kishor (above ₹50,000 and up to ₹5 lakh) and Tarun (above ₹5 lakh and up to ₹10 lakh).

Delinquency

“In cases of delinquency, resolution mechanisms such as Lok Adalats, restructuring of eligible accounts, and one-time settlements are used to address issues. Notably, the gross non-performing assets (NPAs) in PMMY have declined from 3.17 per cent in March 2022 to 2.68 per cent in June 2023,’‘ he added. NPA data for 2023-24 is yet to be released.  

Impact

Since its inception, the PM Mudra Yojana has significantly transformed access to collateral-free institutional credit up to ₹10 lakh. In the fiscal year 2024, while the number of PMMY loans sanctioned increased by 4.1 per cent compared to the previous year, the sanctioned amount saw a substantial 14.3 per cent rise. Notably, more than 69 per cent of beneficiaries under this scheme are women.

The Pradhan Mantri MUDRA Yojana (PMMY) was launched by Prime Minister Narendra Modi on April 8, 2015 to provide loans of up to ₹10 lakh to the non-corporate, non-farm small/micro enterprises.

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