Report has analyzed performance and contribution of the PM Mudra Yojana under the Ministry of Finance towards Micro, small, medium enterprises (MSMEs).
Key Findings of Study
- Overall Performance: Since its launch in 2015, scheme has provided credit support to 35 crore Micro and Small entrepreneur Accounts.
- Financial Inclusion: Women held around 71% of the total number of accounts (FY 2022). Sanctioned amount for new entrepreneurs has also increased.
- Encourages small businesses: Majority loan accounts (80%) are in the Shishu category (FY 2021).
- Regional variation: Number of accounts & amount sanctioned for the Northeast region is not only the lowest but is also decreasing.
Challenges associated with Scheme:
- Scheme Design
- Lack of collateral increases fear of NPA among banks.
- High refinancing rates
- Ceiling of 15% on pay out under Credit Guarantee Fund for Micro Units (CGFMU) is not feasible and restricts benefits of banks.
- Institutional Mechanism
- Poor credit penetration to weaker sections & remote areas
- Lack of centralized database for collecting information about customers
Key recommendations for scheme
- A Portal enabling real-time upload of beneficiary data.
- Increasing digitization e.g. Use of Chatbots for query redressal.
- A recognition mechanism is needed for different Micro Lending Institutions (MLIs) based on their scale of operation and performance.
About PM Mudra Yojana
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