Banks should focus more on women self help groups to expand the reach of the Pradhan Mantri Mudra Yojana, urged Women and Child Welfare Minister Pankaja Munde at an event to promote the central government scheme to fund the non-corporate small business sector in the country. Minister of State for External Affairs V K Singh, who was also present at the event held on Wednesday, referring to the high incidence of suicide of farmers, pointed out that family members of farmers under financial stress can avail of the Mudra loans to set up alternate means of income.
Singh said that family members of farmers can set up other small businesses to bring relief from the financial stress that leads to farmers committing suicide. He also pointed out that setting up of more businesses will create more jobs, which is important for overall economic development of the country. “Employment opportunities are limited and we have to encourage people to expand businesses so that more people can get jobs which can reduce unemployment,” he said.
Speaking about the Mudra loans, Munde said, “While 28,000 people in Mumbai have opted for loans in the Tarun category, around 45 per cent of people in the rural sector have applied for loans under the Shishu category. We are promoting youth but we should also focus on women who are part of self help groups.”
The Mudra scheme has three categories of loans, Shishu which covers loans up to Rs 50,000, Kishor which covers loans between Rs 50,000 and Rs. 5 lakh and Tarun which covers loans between Rs 5 lakh and Rs 10 lakh.
Promising interest subsidies for timely repayment of loans, Munde said that analysis of repayments indicated that 99 per cent of members of Mahila Bachat Gath who applied for loans have completed their repayment.
Referring to the scheme as a work in progress, Singh said, “The process of applying for loans has been simplified now. People have benefited from the scheme since we have reduced the collateral and there is less paperwork to be filled out. There are still certain apprehensions in the minds of people while applying for loans and banks should ensure that people understand that these loans are for their betterment.”