APPROACH:

• Introduce MUDRA scheme (PMMY)
• In body part, compare NPA percentage of PMMY and overall sector
• In conclusion comment upon the statistics.

Ans: The Micro Units Development & Refinance Agency (MUDRA) was launched on April 8, 2015 to provide loans up to Rs 10 lakh to non-corporate, non-farm, small and micro enterprises. Called the Pradhan Mantri Mudra Yojana, loans are given under three categories: Shishu up to Rs 50,000, Kishore Rs 50,001 to Rs 5 lakh, and Tarun from Rs 5 lakh to Rs 10 lakh.

NPA Comparison:

• Bad loans under the Pradhan Mantri MUDRA Yojana for all banks is just 3.38 per cent of the total disbursements, however, the banking sector as a whole stood at 5.97 per cent for the year-ending March 31, 2022.
• Non-performing assets of banks for Mudra loans – including those extended during the Covid-19 pandemic are lower than the average NPAs of the sector as a whole.
• The NPAs for Shishu loans were the lowest at 2.25 per cent of disbursements and the highest for Kishore loans at 4.49 per cent. For Tarun loans bad loans were 2.29 per cent of disbursements.

These comparative figures clearly tell us that when it comes to the Indian banking sector, small borrowers are not the problematic lot, but the large ones are. One reason for the low NPAs of MUDRA loans perhaps lies in the fact that a bulk of them is given to women.