MUDRA Loan target reduced to Rs 3 trillion in 2021-22

Central government has set loans disbursement target under PM Mudra Yojana (PMMY) at Rs 3 trillion for financial year 2021-2022.

Key Points

  • In the financial year 2020-2021, loan disbursement target was Rs 3.21 trillion.
  • Experts attribute lower target to increased allocation under credit guarantee scheme for small businesses.
  • Out of Rs 3.21 trillion loans sanctioned under Pradhan Mantri Mudra Yojana (PMMY) in financial year 2021, Rs 3.12 trillion were disbursed to entrepreneurs.
  • In the financial year 2019-2021, this figure was even higher with total loans of 3.37 trillion. Out of this amount, Rs 3.29 trillion were disbursed.

How loans are provided under the scheme?

Under PMMY, loan up to Rs 10 lakh is provided by banks and non-banking financial companies to small business units for entrepreneurial activities. Loan is also provided to units like manufacturing, trading, services and activities allied to agriculture. Under the scheme, central government allocates annual targets for sanctioning loans. As of June 25 in Financial year 2022, loans worth Rs 3,804 crore have been sanctioned by 13 public sector banks (PSBs).  Mudra loans are provided to small businesses on the basis of priority sector lending of banks.

Pradhan Mantri Mudra Yojana (PMMY)

PMMY was launched by government in 2015 to provide loans up to Rs. 10 lakhs to non-corporate, non-farm small or micro-enterprises. Loans are disbursed through financial institution called MUDRA, that stands for Micro Units Development & Refinance Agency Ltd. It provides funding to non-corporate small business sector by means of last-mile financial institutions such as Banks, Micro Finance Institutions (MFIs) and Non-Banking Financial Companies (NBFCs). However, it does not directly lend to micro-entrepreneurs or individuals.

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