Credit and Finance for MSMEs: The annual quantity of loans sanctioned beneath Prime Minister Narendra Modi’s Pradhan Mantri Mudra Yojana (PMMY) scheme to market entrepreneurship and self-employment has dropped for the initially time because the launch of the scheme in 2015. The quantity of sanctioned loans had grown from 3.4 crores in FY16 to 6.2 crores in FY20 prior to it dropped to 4.3 crores as of March 26, 2021, in the lately concluded FY21, according to the government information on the Mudra scheme. Consequently, the quantity sanctioned also declined from Rs 3.37 lakh crore in FY20 to Rs 2.79 lakh crore in FY21.
“There was almost no business activity in the initial three-four months of the previous financial year because of the lockdown. Even after that, people didn’t want to start their new business amid the prevailing uncertainty in the ecosystem. Despite that, the number of loans sanctioned remains significant and the dip is very marginal due to Covid and lockdown,” Mukesh Mohan Gupta, President, Chamber of Indian Micro, Small & Medium Enterprises (CIMSME) told TheSpuzz Online.
The quantity disbursed had dropped from Rs 3.29 lakh in FY20 to Rs 2.64 lakh as of March 26, 2021. Launched on April 8, 2015, PMMY provided up to Rs 50,000 loan beneath the Shishu cover, Rs 50,000 – 5 lakh loan beneath the Kishor cover, and Rs 5 lakh – Rs 10 lakh beneath the Tarun cover to non-corporate, non-farm MSEs. “Banks too have been keen to lend but due to the subdued activity, entrepreneurs had pulled themselves back from taking much loans. However, we expect growth to resume if the pandemic doesn’t rage,” added Gupta. CIMSME represents about 6,000 MSME members across India.
Also study: PayPal enables collateral-absolutely free loans up to Rs 1 cr for MSMEs, other people through modest enterprise lender FlexiLoans
Over 28.68 crore loans for an quantity of Rs 14.96 lakh crore have been sanctioned as of March 19, 2021, because the launch of the scheme, according to a release by the Ministry of Finance on Wednesday. 88 per cent loans have been Shishu category although almost 24 per cent loans have been provided to new entrepreneurs and about 68 per cent loans had females beneficiaries. Moreover, about 51 per cent loans have been provided to SC/ST/OBC entrepreneurs. Citing a survey by the Ministry of Labour and Employment, Finance Ministry mentioned that PMMY has helped in 1.12 crore jobs creation from 2015 to 2018 of which females accounted for 69 lakh or 62 per cent of new jobs.
Meanwhile, gross bank credit deployed to micro and modest enterprises (MSEs) in December 2020 had jumped 6.6 per cent to Rs 11.31 lakh crore from Rs 10.61 lakh crore through the year-ago period. The December year-on-year (YoY) credit development to MSEs was also up from 6.1 per cent YoY development in November 2020, according to the information from the Reserve Bank of India (RBI). MSME sector had a share of about 18 per cent in the total credit to the business in November 2020, as per RBI information.