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Mudra bad loans: Value low but surge this year

In 2017-18, total loans disbursed under the Mudra scheme stood at Rs 2.46 lakh crore. This shows the gross NPA ratio (NPAs divided by loans disbursed) was 3.96 per cent.

Written by Shyamlal Yadav | New Delhi |
March 13, 2019 4:30:56 am
mudra, mudra loans, mudra loans NPAs, Indian banking system, banks debt, nbfcs, Pradhan Mantri Mudra Yojana, bad loans in mudra, non-banking finance companies, PMMY, bad loans under pmmy, business news In 2017-18, total loans disbursed under the Mudra scheme stood at Rs 2.46 lakh crore.

Non-performing assets under the Pradhan Mantri Mudra Yojna (PMMY), one of the flagship schemes of the NDA government, in the first nine months of the current financial year 2018-19, has jumped almost 53 per cent to Rs 14,930.98 crore compared with Rs 9,769.99 crore in the previous year.

Data obtained by The Indian Express under the RTI Act from the Micro Units Development and Refinance Agency (MUDRA) Limited shows that the total number of Mudra loan NPA accounts increased from 17.99 lakh on March 31, 2018 to 28.83 lakh as on December 31 2018.

In 2017-18, total loans disbursed under the Mudra scheme stood at Rs 2.46 lakh crore. This shows the gross NPA ratio (NPAs divided by loans disbursed) was 3.96 per cent. During April 1, 2018-February 28, 2019, the disbursement was Rs 2.12 lakh crore, as per latest data available with MUDRA. This indicates that NPA ratio has likely risen this year since the absolute amount of NPAs has increased sharply while the disbursements are lower.

To put things in perspective, the NPA ratio of scheduled commercial banks was 11.6 per cent in 2017-2018, suggesting that it may be too early to take a firm view on the levels of Mudra NPAs. The flagship scheme was launched by Prime Minister Narendra Modi on April 8, 2015 for providing loan up to Rs 10 lakh to the non-corporate, non-farm small/micro enterprises. These are called Mudra loans and are provided in three categories i.e. Shishu (up to Rs 50,000), Kishore (from Rs 50,001 to Rs 5 lakh), and Tarun (from Rs 5,00,001 to Rs 10 lakh).

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Data obtained under RTI shows that NPAs are rising in all three segments of loan. While increase in number of Shishu NPA accounts during nine months was 58.33 percent, the increase in NPA Shishu loans was over 64 percent during this period. Likewise, the increase in number of NPA Kishore accounts was more than 70 percent and the increase in the value of Kishore NPAs was nearly 52 percent during this period. On the other hand, the increase in the number of Tarun NPA accounts in these nine months was nearly 45 percent and increase in the value of Tarun NPAs was more than 42 percent.

These loans are given by Commercial Banks, Regional Rural Banks, Small Finance Banks, Cooperative Banks, MFIs and NBFCs. While rate of interest depends on the bank, the type of business and amount taken, the repayment period is normally 5 to seven years.

Data provide by the MUDRA Limited shows that up to December 31 last year as many as 22.77 lakh Shishu loan accounts, 5.48 lakh Kishore loan accounts and more than 55,000 Tarun loan accounts turned NPA, and NPAs in value terms were Rs 4,123.81 crore, Rs 7,200.19 crore and Rs 3,606.98 crore, respectively.

While The Indian Express had sought NPA details for 2015-16 and 2016-17 as well, MUDRA Limited said the exercise to gather NPA data of Mudra loans commenced in 2017-18 only, so it could not provide it for periods prior to March 31, 2018.

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