MUDRA loans to total Rs 1.22 lakh cr by March, says Jaitley

Rs 24,000 cr already advanced to 3.7 mn small entrepreneurs; ministry aims to cover up to 17.5 mn in 2015-16

Those engaged in micro and marginal businesses such as fruit sellers, vegetable vendors, mechanics, barbers or cobblers, will get  a total of Rs 1.22 lakh crore of loans this financial year through the recently launched Micro Units Development and Refinance Agency (MUDRA), finance minister Arun Jaitley said on Friday.

Launching a drive under the scheme at a Punjab National Bank event here, Jaitley said Rs 24,000 crore had been given as advances to 3.7 million small entrepreneurs through MUDRA. The ministry aims to cover 12.5-17.5 mn small business people under MUDRA in 2015-16, he added.

 

The scheme was launched by the prime minister in April to dund and promote micro finance institutions and banks, which would in turn provide loans to small and vulnerable sections of businesses. The initial corpus was Rs 20,000 crore and a credit guarantee fund of Rs 3,000 crore were provided by banks from their priority sector lending shortfall.

A non-banking finance company and part of the Small Industries Development Bank of India, it will later take the form of a bank, through legislation in the next year. Small businesses can take a loan up to Rs 50,000; the highest bracket of loans available to the small and medium enterprises sector would be up to Rs 10 lakh.

The current focus is on small businesses, encompassing a range such as shopkeepers, fruit sellers, vegetable vendors, mechanics, barbers, cobblers and small units, all of which need to borrow from money lenders and informal sources.