Mudra loan sanctions in FY21 drop 21% YoY to 2.7 trn as Covid-19 weighs

Topics MUDRA | Coronavirus | lending

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Loans sanctioned to small businesses and entrepreneurs under the Pradhan Mantri Mudra Yojana (PMMY) dropped to Rs 2.7 trillion in financial year 2020-21 as the Covid-19 pandemic weighed on business activity. Loans sanctioned under PMMY were Rs 3.4 trillion in FY20 and Rs 3.2 trillion in FY19.

About 42 million loans worth Rs 2.7 trillion were sanctioned under the PMMY scheme in the last financial year as on March 19, 2021, said a statement from Ministry of Finance.

The PMMY was launched in 2015 to provide loans up to Rs 10 lakh to non-corporate, non-farm small and micro enterprises. In FY21, about 88 per cent of the loans were sanctioned with amount up to Rs 50,000 which fell under the ‘Shishu’ category, the statement said. Around 24 per cent of the total loans were been given to new entrepreneurs, while 68 per cent of the loans have been given to women entrepreneurs. Loans under the scheme are divided into three categories Shishu that covers loans up to Rs 50,000; Kishore that covers loans from over Rs 50,000 to Rs 5 lakh; and Tarun with loans above Rs 5 lakh to Rs 10 lakh.

The average ticket size of the loans sanctioned in the last financial year, up to March 19, was about Rs 52,000.

NPAs Worries

About 287 million loans worth Rs 14.9 trillion have been sanctioned since launch of the scheme, the statement said.

With the Covid-19 pandemic severely impacting the economy, and the subsequent lockdown leading to closure of several small business units, there are concerns that the non-performing assets under the scheme may increase. NPAs under the scheme were 2.56 per cent in 2019-20 as compared to 2.51 per cent a year ago. The latest quantum of NPAs has not been disclosed yet.

NPAs under PMMY for public sector banks as on March 31, 2020 were Rs 18,836 crore against the total disbursed amount of Rs 3.82 trillion.


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