According to information provided to Parliament by Finance Minister Nirmala Sitharaman, the Non-Performing Assets (NPAs) of Public Sector Banks associated with Mudra loans for small and micro companies decreased from 4.89 percent of total loans in 2019–20 to 3.4% of loans during the financial year that ended on March 31, 2024.
According to her, the non-performing assets (NPAs) of private sector banks associated with Mudra loans decreased from 1.77 percent of all loans in 2020–21 to 0.95 percent in 2023–24.
In a same vein, the nonperforming assets (NPAs) of State Cooperative Banks, Small Finance Banks, and Regional Rural Banks linked to Mudra loans have decreased, indicating an improvement in the asset quality.
FM Sitharaman went on to say that private sector banks charge between 6.96 percent and 28 percent in interest on Mudra loans, while public sector banks provide rates between 9.15 percent and 12.80 percent.
She did, however, stress that monitoring systems are in place to guarantee just recovery procedures and deal with any harassing incidents.
She emphasized that annual data on non-performing assets (NPAs) is gathered to guarantee that banks in both the public and private sectors rigorously pursue their recovery initiatives.
Launched in 2015 as part of the Pradhan Mantri MUDRA Yojana (PMMY), the Mudra loan initiative seeks to support micro and small businesses financially.
Launched in 2015, PMMY is a program that lends up to 10 lakh to micro and small businesses with the goal of helping the underprivileged.
The Budget for 2024–2025 has now raised this cap to Rs 20 lakh.
Those who struggle financially to launch their own firms would especially benefit from this program.
They can now access up to Rs 20 lakh, which will be directly deposited into the beneficiary’s bank account, thanks to the higher loan limit.
It is anticipated that this financial assistance will greatly increase entrepreneurship and self-employment nationwide.
Borrowers may apply for Mudra loans directly from banks or through the government website, www.udyamimitra.in.
Three products are available from the PMMY: “Shishu,” “Kishore,” and “Tarun,” each of which meets the funding requirements and growth stages of micro units and entrepreneurs.
In addition to an annual cost depending on the lowered loan level, borrowers will be required to pay an upfront guarantee fee.
