Banks need to lend Rs 1 lakh crore to meet Mudra Yojana target for FY19

With less than one month left in the fiscal year 2018-19, banks may have to struggle hard as they have failed to meet the lending target of Rs 3 lakh crore under Micro Units Development and Refinance Agency Ltd (Mudra) Yojana. The banks have only been able to disburse Rs 2 lakh crore and are in pressure of meeting the target before the end of the fiscal year.

According to the Budget report 2019, the government intends to disburse loans of upto Rs 3 lakh crore until March 31, 2019. Despite the pressure from the Center and 'MSME loan in 59 minutes' scheme, the banks have failed to meet the lending targets.

The total loan disbursed under the Mudra Yojana as on February 22, 2019, stood at Rs 2,02,668.9 crore as against sanctioned amount of Rs 2,10,759.51 crore, said a government data.

In the fiscal year 2017-18, the lending at Rs 2,46,437.40 crore had exceeded the target. In fact, lending under the scheme has exceeded the targets in all previous fiscals. According to the data by the finance ministry, in total, 3.89 crore Mudra loans have been sanctioned this fiscal year. Banks were aggressively asked to lend loans to small entrepreneurs especially women and to the backward classes.

Pradhan Mantri Mudra Yojana was launched on April 8, 2015, and aims to provide loans up to Rs 10 lakh to the non-corporate, non-farm, small/micro enterprises. Loans under Mudra Yojana are given under the Shishu (up to Rs 50,000), Kishore (Rs 50,000 to Rs 5 lakh) and Tarun (Rs 5-10 lakh) categories.

The Department of Financial Services (DFS) is already putting pressure on the banks to meet the targets before the closing date. According to a DFS source, an increasing number of banks under Prompt Corrective Action and rising bad loans under the Mudra scheme have dragged the lending.

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