MUDRA Loans ....................................
194 lending institutions disburse `6.46 trillion in 3 years
Micro Units Development and Refinance Agency (MUDRA) functions as an NBFC supporting banks and MFIs for lending to micro units having loan requirement up to `1 million under the Pradhan Mantri MUDRA Yojana (PMMY), which was launched by Prime Minister Narendra Modi in April 2015.
MUDRA loans are extended for a variety of purposes intended for income generation and employment creation in manufacturing, services, retail and agri and allied activities. The total amount of loans disbursed under this scheme was `1.32 trillion in the first year (2015-16), which increased to `1.73 trillion in 2016-17, and to `2.46 trillion in 2017-18. A spokesman of the department of financial services says `914.52 billion of MUDRA loans have been disbursed as of 21 September 2018 in the current financial year. The cumulative disbursement figure is `6.46 trillion, against the sanctioned amount of `6.68 trillion since the inception of PMMY.
ShiShu, KiShor, taruN
The interventions under MUDRA are through ‘Shishu’ (up to `50,000), ‘Kishor’ (`50,000 to `500,000) and ‘Tarun’ (`500,000 to `1 million) signifying the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur. The spokesman said the cumulative disbursed amount of Shishu loans since the beginning of MUDRA till 21 September 2018 is `2.92 trillion (sanctioned `2.99 trillion), whereas Kishor and Tarun loans have been to the tune of `2.03 trillion (sanctioned `2.13 trillion) and `1.50 trillion (sanctioned `1.56 trillion) respectively in the same duration.
MUDRA has partnered with 194 lending institutions comprising 27 public sector banks, 18 private sector banks, 31 RRBs, 14 cooperative banks, 47 NBFC-MFIs, 26 MFIs and 31 NBFCs. The list is periodically revised by the department of financial services as and when new institutions get added.
MUDRA is issuing a RuPay debit card against working capital limits issued under PMMY. Since the cards issued during a year are applicable in the next year also, the number of cards reported relates to only new cards issued during the year, which is in addition to the existing cards. The spokesman says the total number of MUDRA cards issued is over 850,000.”
ColleCtiNG BaNK Data
MUDRA has developed a dedicated web portal for collecting data from lending institutions under PMMY. The information collected also includes state-wise data of each lending institution.
With a view to enlarge the footprint in delivery of products and services in the MSME ecosystem, SIDBI has launched a
portal Udyamimitra.in, which is a virtual market place aimed at providing end-toend solutions, not only for credit delivery but also for a host of related services by way of hand holding support, application tracking and multiple interface with stakeholders (i.e. banks, service providers, applicants). The spokesman explains: “MUDRA borrower may also avail the services of the portal. It provides access to financial services at 125,000 bank branches and non-financial services at 17000+ hand holding agencies.”
To facilitate filling of loan application forms online, a new feature ‘Hand-holding in A Virtual Environment’ (HAVE), has been introduced on the portal, which may be used by hand-holding for filling in the application forms online on behalf of the applicants and sending back the filled-in forms back to the applicant for submission through the portal. The applicant may navigate through the portal to identify the nature of hand-holding support required. Says the spokesman: “Broadly, handholding support is provided in 7 areas of expertise viz, skilling (vocational), financial literacy training, entrepreneurship development program, mentoring, project report preparation, loan application filling, work sheds from district industries centers and margin money for subsidy support.”
Another important feature of the portal is matchmaking between MSME loan seekers, lenders and hand holding agencies. Inclusive access is provided to all. “All submitted applications will be available at virtual market place for credit access to entrepreneurs and status visible to all stakeholders like lenders, handholding agencies, applicants, and SIDBI, NABARD and government agencies till the same is disbursed by one of the banks,” the spokesman added.
SYNerGieS with SChemeS
MUDRA has created synergies with other government schemes. Under the Standup India schemes loan amount is greater than `1 million. MUDRA borrowers can graduate to loans over `1 million, says the spokesmen, adding: “Financial assistance under National Rural Livelihood Mission (NRLM) and National Urban Livelihoods Mission (NULM), which are eligible activities, are also categorized as PMMY loans.”
The government has taken various steps towards effective implementation of the MUDRA scheme. These include intensive publicity campaigns, simplification of application forms, credit guarantee scheme, nomination of MUDRA nodal officer etc.
The spokesman says information of borrowers available in credit bureaus helps banks and MFIs for faster credit dispensation under PMMY and also for subsequent loans.
MUDRA is giving refinance to MFIs at a concessional rate of 6.85% which benefits the end borrower. It has adopted a unique feature of financial intermediation while extending assistance to NBFCs. NBFCs extending loan / resource support to MFIs (both NBFC-MFIs and non-NBFC MFIs) for on-lending to ultimate borrowers, are considered as eligible institutions for refinance support from MUDRA. The spokesman clarifies that under this, several smaller MFIs, which are generally not eligible to draw refinance support from financial institutions on account of their small scale of operations, can avail assistance from MUDRA through NBFCs. Under this mechanism, assistance was sanctioned to two such financial institutions.
The spokesman estimates that cumulative NPA percentage under MUDRA Yojana is 2.58% as on 31 March 2018 against disbursement.