Mudra loan payouts at the highest pre-Covid level


Small business loans under the Pradhan Mantri Mudra Yojana (PMMY) are back on track, with payouts exceeding pre-Covid levels.

Banks and other authorities have paid out 1.58 lakh crore so far in the current financial year, much more than the 1.21 lakh crore that were extended in the same period last year that was hit by the Covid pandemic the year before Covid (April-December 2019), payouts of ₹ 1.51-lakh crore.

“Apparently, the segment has had more traction in the current fiscal year due to the normalization of economic activity, especially over the past three months,” said a field general manager at a public bank Business line.

Lead Sishu Loans

Mudra loans come in three categories – Shishu (up to ₹ 50,000), Kishor from 50,000 to 5 lakh), and Tarun (from ₹ 5 to 10 lakh). Shishu loans make up the lion’s share of the total payout at around 48 percent.

According to an official with the State Bank of India, the demand for Sishu loans has increased in recent months; This category will now come with a 2 percent interest subsidy announced by the center as part of the Covid-19 aid package.

Mudra has also extended the final deadline for final claims filing for the 2 percent interest subsidy scheme (ISS) to December 31, 2021. After that, “the PMMY portal for ISS claims filing will be closed,” a notification said.

Overvoltage seen in FY22

Given this rate of growth, bankers expect the overall performance of mudra loans to be significantly higher this fiscal year.

The payout trends in recent years show a jump in the last three to four months of the budget year. More than half of the total loans were disbursed in the last four months of FY19, FY20 and FY21.

In terms of overall performance, mudra sanctions were lower than FY20 at 3.21.759 billion yen in FY21. In FY19, loans totaled ₹ 3.21.722 billion were made to small businesses. According to recent data, sanctions totaled yen 3,37,495 billion in FY20, up 5 percent from FY19.


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