MUDRA Scheme Protects The Interests Of The Entrepreneurs: PM Narendra Modi

Interacting with the beneficiaries of the MUDRA scheme, yesterday PM Narendra Modi has stated that the scheme has immensely benefited entrepreneurs from every section of the society.

Narendra Modi stated that the Mudra Yojana has become a job multiplier. He further added that the initiative has helped in relieving the entrepreneurs from the vicious cycle of moneylenders and middlemen. It has opened up new opportunities for the youth, women and those who wanted to start or expand their businesses.

MUDRA scheme is one of the 50+ schemes launched in recent years to boost entrepreneurship in the country. Under Pradhan Mantri MUDRA Yojana, the government has so far given out 12 Cr loans worth $84.4 Bn (INR 5.75 Lakh Crore). Out of which 28% of the loans which are worth $48 Bn (INR 3.25 lakh crore) were given to first-time entrepreneurs. Of the total loans disbursed, over 74% of the total beneficiaries were women and 55% of the loans were given to SC/ST and OBC communities.

The MUDRA scheme was launched by PM Narendra Modi on April 8, 2015 for providing loans of up to $14,750 (INR 10 lakh) to the non-corporate, non-farm small or micro-enterprises. These loans are classified as MUDRA loans under PMMY. These loans are given by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs.

Railway Minister Piyush Goyal tweeted, “Pradhan Mantri Mudra Yojana has much lower NPAs than other bank loans, which shows honesty of small entrepreneurs from weaker & deprived sections of the society, reposing PM Narendra Modi’s faith on uplifting the poor by empowering them with resources.”

However, despite having been offered an attractive discount on the interest rates to be paid by women, loans sanctioned to women under the MUDRA scheme has fallen by 5.8% points in 2016-17 according to a reply by finance minister Arun Jaitley to the Lok Sabha, earlier this year.

While the average loan disbursed to the beneficiaries (Shishu beneficiaries which constituted around 90% of the total) varied from $339 to $398 (INR 23K to INR 27K) in 2015-2016, the average increased to $767 (INR 52K) in the next year.

The scheme not only aims to help entrepreneurs looking to start their own business under $737 (INR 50K) to $14,750 (INR 10 Lakhs) categories but also aims to cater to the marginalised class of the society, especially women. The MUDRA scheme allows women beneficiaries, a discount of 25 basis points (a basis point is a hundredth of a percent) on the interest charged on loans to women under the Women Enterprise Programme.