Banks Have Sanctioned Loans Over Rs.15 Lakh Crore Under PMMY

On Wednesday, the Finance Ministry said financial institutions and banks had sanctioned more than Rs.15 lakh crore to 28 crore beneficiaries over the past six years under the Pradhan Mantri Mudra Yojana (PMMY) scheme. As of 26th March 2021, the total loans sanctioned by member institutions has amounted to Rs.15.10 lakh crore. Prime Minister Shri Narendra Modi launched the PMMY scheme in 2015 to promote entrepreneurship amongst marginalised and socio-economically neglected classes of persons. 

Under this scheme, beneficiaries can avail of loans up to Rs.10 lakh for income-generating activities in trading, manufacturing and service sectors and activities related to agriculture. The Finance Minister had stated in a tweet that the scheme had been launched to give a feeling of self-worth and independence to the beneficiaries while giving wings to their dreams.

Under the PMMY scheme, collateral-free loans are offered by member lending Institutions through scheduled commercial banks, Small Finance Banks (SFBs), Regional Rural Banks (RRBs), Micro Finance Institutions (MFIs), and Non-Banking Financial Companies (NBFCs). The loans are provided under three categories, i.e. Shishu, where loans are sanctioned up to Rs.50,000; Kishore, for loans sanctioned between Rs.50,000 and Rs.5 lakh; and Tarun, for loans sanctioned up to Rs.10 lakh.

In 2020, the government provided a two per cent interest subvention to loans taken under the Shishu category. This was a part of the Atmanirbhar Bharat Abhiyan stimulus package to tide over the economic crisis resulting from the ongoing Covid-19 pandemic. However, it was extended only to loans that did not come under the non-performing asset (NPA) category.

For any clarifications/feedback on the topic, please contact the writer at athena.rebello@cleartax.in

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