Over 90% beneficiaries under PMMY scheme got loans less than Rs 50,000

Under the scheme, loans up to Rs 10 lakh are provided to small entrepreneurs to set up micro units.

Published: 22nd October 2018 03:46 AM  |   Last Updated: 22nd October 2018 03:46 AM   |  A+A-

Image for representational purpose only.

Express News Service

NEW DELHI: Over 90% beneficiaries under the government’s ambitious Pradhan Mantri Mudra Yojana (PMMY) were given loans of less than Rs 50,000. This fact emerged from a scrutiny of the government data.

Under the scheme, loans up to Rs 10 lakh are provided to small entrepreneurs to set up micro units. However, a number of stakeholders, including traders’ associations, bank officials and policy experts,

TNIE spoke to said that an amount of Rs 50,000 or less could hardly help one in setting up or expanding a business.

Under PMMY, disburse loans under three categories —Shishu (up to Rs 50,000), Kishore (Rs 50,000-Rs 5 lakh) and Tarun (Rs 5 lakh-Rs 10 lakh). 

A break-up of the data disclosed that of the total 13.47 crore people who have availed of Mudra loans since its inception in 2015, 12.23 crore received the payouts under the Shishu category. 
Over 1.04 crore people got loans under the Kishore category and only about 19 lakh people received the payouts under the Tarun category. 

Asserting that granting loans of Rs 50,000 or less defeated the very purpose of the scheme, Rakesh Kumar, president of Federation of Sadar Bazar Traders’ Association in Delhi, said, “Let alone a small enterprise, even a street vendor can’t start a business with Rs 40,000-Rs 50,000 in any city. In Delhi’s Sadar Market, even a patriwala (roadside vendor) has items worth more than Rs 50,000.”

Kumar said in many cases, people got loans with the help of middlemen and had to pay commissions. “Many such people would not return the money to the banks,” he said, explaining one of the possible reasons for a massive Rs 11,000 crore (approximately) of Mudra loans turning onto bad loans. 
However, Anil Bhardwaj, Federation of Indian Micro and Small & Medium Enterprises, had a different opinion. “This is a loan for micro-financing and may help people in rural areas… People can start tea selling or some similar business,” he said.

Meanwhile, under a relentless Opposition attack on the issue of job creation, the government has planned a comprehensive study to assess the impact of PMMY on the outreach and access for micro-entrepreneurs. The study will cover about 1,00,000 PMMY borrowers. 

The study will assess whether the scheme has led to any changes in the income/asset growth of the beneficiaries; in the business in terms of increase in turnover, income, employment etc.; recovery of assets hypothecated or mortgaged, among others. 


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp