MUDRA Scheme In FY16 Under Rs 1.22 Lakh Crore : 26 Sept 2015

MUDRA Scheme In FY16

The government plans to disburse an ambitious Rs 1.22 lakh crore as loans to micro and small businesses this fiscal under the Pradhan Mantri MUDRA Yojana, finance minister Arun Jaitley said. "We are targeting a loan disbursal of Rs 1.22 lakh crore from the banking system to these small entrepreneurs by March 2016 so that they can establish some or other kinds of business and create new jobs," he said at the launch of a mega credit drive under the MUDRA scheme by Punjab National Bank. Banks have already disbursed Rs 24,000 crore to 27 lakh small entrepreneurs under the scheme, which was launched by Prime Minister Narendra Modi on August 8 this year. Announcing that borrowers under the scheme will be exempted from furnishing any bank guarantee to avail loans, Jaitley said that the government aims to cover around 1.25-1.75 crore small business people by March 2016. "These poor people need not give loan guarantee, neither they have resources to give the security. We have given them this facility. We want to encourage crores of new entrepreneurs in the country. They will not be dependent on any kind of doles, but would be encouraged to stand on their own feet by these kinds of facilities," he added. The finance minister however stressed that loans under the MUDRA scheme will not be given based on favoritism. Bank officials would first assess how the small entrepreneurs would use the amount, based on which they will be entitled to get the loan. "This money will not be a fair (mela) to give away money of state and private banks. It will be linked to business and related projects. Beginning a campaign today till October 2, we will take this loan programme forward to make it more popular," he added. MUDRA was established as a subsidiary of the Small Industries Development Bank of India (SIDBI) with an initial corpus of Rs 5,000 crore to provide capital to all banks seeking refinancing of small business loans under PMMY. PMMY loans fall into three categories - Shishu (up to Rs 50,000), Kishore (Rs 50,000-Rs 5 lakh), Tarun (Rs 5-10 lakh). The current focus of the government is on Shishu category of micro loans, which encompass a range of small activities like shop-keepers, fruit sellers, vegetable vendors, mechanics, barbers, cobblers, small manufacturing units and a lot of other small service sector enterprises which borrow from money lenders and informal sources. Finance minister Arun Jaitley has once again taken up India's stand for voice reforms in the World Bank to ensure that emerging economies have a greater role in the functioning of the multilateral lending agency. 

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