In her budget speech for the fiscal year 2024, Finance Minister Nirmala Sitharaman shed light on the noteworthy achievements and ongoing progress of the Pradhan Mantri Mudra Yojana (Mudra Scheme). Launched in 2015, the scheme aims to refinance last-mile financiers who provide crucial financial support to micro and small businesses in various sectors, including manufacturing, trading, services, and agri-allied activities. This blog delves into the key statistics and developments related to the Mudra Scheme as disclosed by the Finance Minister during her budget presentation.

Loan Disbursement Overview

As of March 2023, the Mudra Scheme has witnessed a commendable deployment of 43 crore loans, amounting to a substantial sum of Rs 22.5 crore. Of particular significance is the fact that 30 crore of these loans have been extended to women entrepreneurs, showcasing a commitment to fostering gender inclusivity in the entrepreneurial landscape. The data sourced from the Mudra portal further indicates that by the end of March 2023, 6.23 crore loans were sanctioned, totaling Rs 4.56 lakh crore, with a disbursement of Rs 4.50 lakh crore.

Fast forward to January 26, 2024, and the current fiscal year has seen an additional 4.9 crore loans being sanctioned, involving a sum of Rs 3.90 lakh crore. Notably, Rs 3.83 lakh crore out of the sanctioned amount has been disbursed, underlining a consistent effort to inject liquidity into the targeted sectors.

Asset Quality and Non-Performing Assets (NPAs)

One critical aspect of evaluating the Mudra Scheme’s performance is the assessment of asset quality, particularly non-performing assets (NPAs). According to data shared by Bhagwat Karad, the Minister of State in the finance ministry, in the Rajya Sabha on December 19, 2023, the total NPAs as a percentage of credit disbursed under the Mudra scheme stood at 2.68% as of June 2023. This percentage reflects a marginal increase from the level recorded as of March 31, 2023, which stood at 2.62%. However, it is essential to acknowledge the positive trend of reducing NPAs from 3.17% as of March 2022, indicating prudent management and risk mitigation strategies.

The Concept of Three Stages in Mudra Scheme

The Mudra Scheme operates across three stages, namely Shishu, Kishor, and Tarun, each catering to different financial needs of businesses. Shishu offers credit with financial limits up to Rs 50,000, Kishor extends support in the range of Rs 50,000 to Rs 5 lakh, while Tarun facilitates higher credit limits ranging from Rs 5 lakh to Rs 10 lakh. This tiered approach ensures that businesses of varying scales receive targeted financial assistance, contributing to the overall growth of the micro and small business sector.

The data presented in the budget 2024 speech by Finance Minister Nirmala Sitharaman indicates a positive trajectory for the Mudra Scheme. The significant number of loans disbursed, particularly to women entrepreneurs, underscores the scheme’s impact on fostering inclusive economic growth. While the marginal uptick in NPAs requires vigilance, the overall trend of NPA reduction showcases a commitment to maintaining the scheme’s financial health. As the Mudra Scheme continues to be a pivotal instrument in promoting financial inclusion and supporting small businesses, continuous monitoring and strategic interventions will be crucial for sustaining its positive impact in the years to come.