The disbursements of small business loans under Pradhan Mantri Mudra Yojana (PMMY) registered an all time high at ₹4.46-lakh crore in the financial year ended March 31, 2023. This was a 34.7 per cent growth over the previous year’s ₹3.31-lakh crore, as per the latest data of Mudra. 

”We find that the scheme is relatively better known in rural areas now compared to previous years and there has been a greater demand from rural areas especially for women Shishu loans,’‘ a senior Mudra official told businessline.

While the number of Mudra loans sanctioned increased by 14 per cent in FY23, disbursements growth at 35 per cent surpassed sanctioned amount growth (33 per cent). 

”Higher disbursement growth in comparison to sanctions indicates borrowers’ improved willingness for credit utilisation. The ratio of disbursed to sanctioned amount also hit an all-time high of 99 per cent in FY23, showing borrowers’ readiness to use the sanctioned funds,’‘ Bibekananda Panda, Senior Economist, State Bank of India (SBI) said.  

“Notably, the average size of a sanctioned Mudra loan has hit a new high of ₹73,489 in FY23, 17 per cent higher than ₹63,037 of FY22. Though detailed information for FY23 is yet to be available, the trend indicates that the high-value category of Mudra loans, namely Tarun and Kishore, has been growing steadily,’‘ he added. 

Robust balance sheets of commercial banks along with lower delinquencies and strong appetite from borrowers for Mudra credit are boosting the confidence of banks to expand in this segment.

“This bodes well with overall double-digit credit growth and over 20 per cent growth in MSME, services and personal loans segment.,’‘ Panda added.

According to the data of the Ministry of Finance, the Non-Performing Assets in the PMMY loans were at 3.17 per cent as of March 2022. The consolidated numbers on the quantum of NPAs FY23 have not been released yet. 

As part of PMMY launched in April 2015, Mudra loans are extended in three categories — Shishu (up to ₹50,000), Kishor (above ₹50,000 and up to ₹5 lakh) and Tarun (above ₹5 lakh and up to ₹10 lakh).