The Pradhan Mantri Mudra Yojana (PMMY) has experienced a remarkable surge in loan disbursals, reaching ₹81,597 crore in the first quarter of FY24. This significant growth of 23% compared to the previous year’s first quarter highlights the increasing demand for loans, particularly in the Tarun category. As borrowers upgrade from the Sishu category, this surge in disbursals represents the highest-ever increase during the initial quarter since the launch of the PMMY scheme.
The previous financial year (FY23) witnessed PMMY disbursing a record-breaking ₹4.50 lakh crore in small business loans, reflecting an impressive growth rate of 34.7% compared to the previous year’s figures. Additionally, the average size of Mudra loans rose to ₹73,489 in FY23, indicating a positive trend in loan utilization.
The surge in disbursals and high credit utilization, with the ratio of disbursed to sanctioned amounts reaching 99% in FY23, underscores the increased economic activity in rural and semi-urban areas. This encouraging trend has prompted existing customers to upgrade their loans and has attracted first-time borrowers, driving the growth of PMMY loans.
However, the rapid expansion of Mudra loans raises concerns about a potential increase in non-performing assets (NPAs). Financial experts and officials are monitoring this situation closely to ensure careful management of loan portfolios.
The Pradhan Mantri Mudra Yojana, launched in 2015, continues to provide crucial financial support to small and micro-enterprises. The scheme offers loans under 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). The recent growth in PMMY disbursals signifies the government’s commitment to fostering entrepreneurship and supporting small businesses, ultimately contributing to the economic development of the country.