In the last quarter of the 2018-19 financial year, Gujarat reported a huge jump of 34 per cent in the amount of loans that have turned NPAs (non-performing assets) disbursed under the Pradhan Mantri Mudra Yojana (PMMY) in the state.According to the latest report published by the State Level Bankers’ Committee (SLBC) in Gujarat, in just three months — between December 2018 and March 2019 — the NPAs under the central government loan scheme for promoting small and micro enterprises crossed Rs 516 crore in 99,541 “stressed” accounts.
It was Rs 384.87 crore in 68,691 accounts by December 2018, at the end of the previous financial quarter, according to the report. The total NPAs in PMMY in Gujarat, as a consequence, rose from 4.4 per cent in December 2018 to 5.12 per cent by March 2019.
Pradhan Mantri MUDRA Yojana (PMMY) was launched by Prime Minister Narendra Modi on April 8, 2015, to promote entrepreneurship and to help small businesses, which have been outside the ambit of a mainstream bank.
Under the scheme, each bank was given a target to give collateral-free loans up to Rs 10 lakh under three categories — Shishu (up to Rs 50,000), Kishore (Rs 50,000-Rs 5 lakh) and Tarun (Rs 10 lakh). These loans are given for a business purpose, capacity expansion, and modernisation.
Strangely, smaller Shishu accounts have a higher NPAs.
Of the total Rs 516 crore NPAs in PMMY in Gujarat, 40.64 per cent are in Shishu accounts.
Not just that. During this three month period, the highest jump has been in the quantum of loans disbursed to Shishu accounts.
The Shishu loans that have turned NPAs more than doubled to Rs 209.87 crore in March 2019 from Rs 106.72 crore in December 2018.
In comparison, the NPAs in Kishore and Tarun accounts rose only by 6.11 per cent and 17.2 per cent respectively, in the same period.
Despite the rising NPAs in PMMY, bankers feel that the situation is not alarming. “The sector does not have an alarming NPAs. Even pan-India, the Mudra loan NPAs is between 5-6 per cent. There are some pockets in the state where the delinquency rates — the percentage of loans within a financial institution’s loan portfolio whose payments are overdue — is higher. A pocket like Surat has very low delinquency and the NPAs will not be more than two per cent,” said Vikramaditya Singh Khichi, Executive Director of Bank of Baroda which is the convener of SLBC in Gujarat and Union Territories of Diu, Daman and Dadra-Nagar Haveli.
According to the SLBC report, against a disbursement target of Rs 8,083 crore for the 2018-19 financial year, banks in Gujarat have disbursed Rs 6,595 crore of PMMY loans — 81.6 per cent of the target. However, banks have been not been to keep a tab on the PMMY loans turning into NPAs.
In the past, bankers have told The Sunday Express that beneficiaries under Shishu and Kishore categories do not turn up for repayment and the banks do have the necessary manpower to follow-up on smaller loanees, especially those who borrow Rs 50,000 or less.