Rs 23.2 lakh cr sanctioned to over 40.82 cr accounts under Mudra loan scheme since inception: Nirmala Sitharaman

Launched on April 8, 2015, by Prime Minister Narendra Modi, the scheme aims to facilitate easy collateral-free micro-credit of up to Rs 10 lakh to non-corporate, non-farm small and micro-entrepreneurs for income-generating activities.

“About 68% of accounts under the scheme belong to women entrepreneurs and 51% of accounts belong to entrepreneurs of SC/ST and OBC categories. This demonstrates that easy availability of credit to the budding entrepreneurs of the country has led to innovation and sustained increase in per capita income,” the finance minister said on eight years of completion of the scheme.

The PMMY scheme has helped in the generation of large-scale employment opportunities at the grassroots level and has proved to be a game changer while boosting the Indian economy, she said.

Of the total loans sanctioned, approximately 21% of the total loans have been sanctioned to new entrepreneurs, according to the finance ministry.

The Mudra loans are categorised into three types—Shishu (loans up to Rs 50,000/-), Kishore (loans above Rs 50,000 and up to Rs 5 lakh), and Tarun (loans above Rs 5 lakh and up to Rs 10 lakh).

The loans are provided to meet both term loan and working capital components of financing for income-generating activities in manufacturing, trading, and service sectors, including activities allied to agriculture such as poultry, dairy, beekeeping, etc.

The rate of interest is decided by lending institutions in terms of RBI guidelines.  In the case of a working capital facility, interest is charged only on money held overnight by the borrower.