Mudra Loan disbursal touches US$ 15 billion on October 15

The loans disbursed through the Pradhan Mantri Mudra Yojana (PMMY) exhibited positive growth in H1 of 2021

October 22, 2021

The revival of the rural economy through the establishment of small businesses is the key factor behind the recovery.

Public sector banks are pioneering the sanctioning of Mudra loans whereas private banks have taken a cautious approach.

Of the three categories of loans disbursed under the Mudra Yojana, Shishu loans are the most demanded.

FY2020 saw a 5% increase in the sanctioning of Mudra loans by private banks.

As of October 15, funds worth US$ 15 billion (Rs 1,17,332 crore) have been disbursed under the Pradhan Mantri Mudra Yojana (PMMY) to small businesses as against US$ 11 billion (Rs 85,000 crore) in the previous fiscal year. The first half of 2021 paved the way for the normalization of Mudra loan performance in the aftermath of the pandemic. The positive development is fueled by the revival of the rural economy through the establishment of small businesses and the disbursal of petty loans. Industry experts reveal that public sector banks are leading the lending of Mudra loans as against private sector banks that have adopted a cautious stance. The loans which are disbursed under the category of Shishu (up to US$ 667) , Kishor (US$ 667-US$ 6674) and Tarun (US$ 6674 – US$ 13,349) are exhibiting a positive growth trajectory. 

As of March 30 2020, the total amount of Mudra loans sanctioned exceeded US$ 45 billion (Rs 3,37,495 crore). The financial year saw a 5% increase in the tota sanction of loan with private sector banks sanctioning US$ 12.25 billion (Rs 91,780 crore) worth of loans and Non-Banking Finance Companies with US$ 5.4 billion (Rs 40,518 crore) worth of loans. The leading public sector banks that disbursed Mudra loans included the State Bank of India, Bank of Baroda and Canara Bank. At the State level, Tamil Nadu, Uttar Pradesh and Karnataka were the States that sanctioned the maximum amount of loans.