Credit and finance for MSMEs: “Having successfully weathered the pandemic blunt in both disbursals as also the number of accounts, Mudra now appears destined for higher glories benefitting the social fabric of the country through bringing financial freedom to fringe groups of women, minorities, SCs, STs, OBCs,” the report said.
Credit and finance for MSMEs: The number of loans up to Rs 10 lakh sanctioned and disbursed under Pradhan Mantri Mudra Yojana (PMMY) to micro and small enterprises recorded an all-time high growth in the financial year 2022-23, on the back of post-Covid demand from the country’s hinterlands. According to the data shared in an SBI Research on the scheme, the sanctioned loan volume reached a new high of 6.23 crores in FY23 from the earlier peak of 6.20 crores in FY20 that dropped to 5.07 crores in FY21 and began recovery with 5.37 crores loans sanctioned in FY22.
Likewise, the loan amount disbursed grew from Rs 3.31 crore in FY22 to Rs 4.50 crore in FY23 after declining to Rs 3.11 crore in FY21 from Rs 3.29 crore in FY20, data showed.
“The growth in the amount of loans disbursed averaged 33 per cent in the first three years but declined thereafter due to Covid. Again, disbursal increased by around 36 per cent in FY23, signalling return of animal spirits at the bottom of the pyramid of India Inc.,” the report authored by SBI’s Group Chief Economic Adviser Soumya Kanti Ghosh noted.
Moreover, the average ticket size of Mudra loans also nearly doubled in the last eight years from around Rs 38,000 in FY16 to approximately Rs 72,000 in FY23 with “encouraging trends” being seen in the disbursal of Tarun and Kishor variants of the scheme with higher loan limits addressing the “missing middle problem” in enterprises growth, the research added.
Mudra loans have been divided into three categories — Shishu loans of up to Rs 50,000, Kishore loans above Rs 50,000 and up to Rs 5 lakh, and Tarun loans above Rs 5 lakh and up to `10 lakh. About 40% of the total loans sanctioned under the MUDRA scheme come under the Shishu category.
The loan volume share of the ‘Shishu’ variant reduced from 92.9 per cent in 2016 to 77.6 per cent in 2022 as the Kishore and Tarun variants expanded. The Kishore loan share grew from 5.9 per cent to 20.6 per cent while Tarun loans scaled from 1.2 per cent to 1.8 per cent during the said period.
The size of loans disbursed also jumped in the Kishore variant with a 40.2 per cent share in total Mudra disbursements in 2022 from 31.3 per cent in 2016 while Shishu loans disbursed had a share of 37.4 per cent in 2022, down from 45.8 per cent in 2016. Disbursement share in the Tarun category remained almost flat with a 22.9 per cent share in 2016 and a 22.3 per cent share in 2022.
The report noted that having successfully weathered the pandemic blunt in both disbursals as also the number of accounts, Mudra now appears destined for higher glories benefitting the social fabric of the country through bringing financial freedom to fringe groups of women, minorities, SCs, STs, OBCs as also fuelling new age entrepreneurship across manufacturing/services/trade.