RBI panel on MSMEs suggests Rs.20 lakh collateral-free loan under Mudra
An expert committee of the Reserve Bank of India (RBI) has recommended doubling the cap for the collateral-free loans from Rs.10 lakh to Rs.20 lakh on micro, small, and medium enterprises (MSMEs). This loan can be availed by individuals who fall under the Mudra scheme, MSMEs, and self-help groups.
The proposal has been put forward in a report which has been prepared by an 8-member RBI committee. The committee is responsible for reviewing the current framework for the MSME sector. The committee has suggested a number of long-term solutions for the economic and financial sustainability of the MSMEs. It should also be noted that the recommendation from the panel has come up at a time when the government is looking into changing the way MSMEs are defined.
2 July 2019
Pradhan Mantri Mudra Yojana Funds Micro and Small Units
Small scale and micro industries are gaining momentum all over the country as Prime Minister, Narendra Modi urges more and more people to quit being job hunters and start being job creators.
One such financial measure known as the Pradhan Mantri Mudra Yojana essentially funds such small scale business enterprises that hold potential to grow in the future. Because the proportion of people working in small enterprises is significantly higher than those working at multinational corporations, the Government of India has launched the Pradhan Mantri Mudra Yojana under the Micro Units Development and Refinance Agency, (MUDRA) bank.
The Mudra loan will fundamentally help enhance the economic and financial support that are provided to small and micro units. It is nothing but a funding model aimed specifically at the non-farming and non-corporate sector, to help them generate income for enterprises and activities who credit requirements are less than Rs.10 lakh.
12 October 2018
MUDRA to assess the Pradhan Mantri Mudra Yojana (PMMY) Scheme
The Pradhan Mantri Mudra Yojana Scheme was introduced to disburse loans to small and medium (SME) businesses across India. The scheme has completed 3 years and has disbursed about Rs.6-lakh crore to various businesses. With regard to this, an apex body for this scheme, the Micro Units Development & Refinance Agency (MUDRA) is about to commission a massive field-based assessment through an independent agency.
A senior official of MUDRA stated that the purpose of this assessment is to check for any opportunity for income growth to microentrepreneurs, especially disadvantaged individuals and women. He also stated that MUDRA is trying to document the impact of PMMY for the last 3 years. Launched in April 2015, MUDRA has successfully disbursed Rs.2,46,437 crore in 2017-2018 and around Rs.75,954 until 24 August in the current financial year. The overall total number of current loan accounts is more than 13 crore. Loans are offered under 3 categories namely, Shishu which offers up to Rs.50,000, Kishor which offers from Rs.50,000 up to Rs.5 lakh, and Tarun which offers from Rs.5 lakh up to Rs.10 lakh. MUDRA is also looking into other channels, such as microfinance institutions and intermediary organisations to leverage additional funds. There has also been a demand from certain sections to upgrade the loan structure which is being looked into. This assessment is expected to be completed within 6 months.
28 September 2018
PM: Over 13 Crore Mudra Loans Sanctioned
Prime Minister Narendra Modi has claimed that over 13 crore people have been provided with loans under the Pradhan Mantri MUDRA Yojana. The Prime Minister made the statement while addressing the country on Independence Day.
According to Mr. Modi, of the 13 crore loans sanctioned, nearly 4 crore have been disbursed to first-time borrowers. The MUDRA loan was launched by the Prime Minister in 2015 to provide financial aid to those individuals in the small business sector.
The MUDRA loans can be availed for a minimum of Rs.50,000 to a maximum amount of Rs.10 lakh.
29 August 2018
MUDRA Scheme to Offer 45% Loans to General Category and 32% to OBCs
Under the Micro Units Development and Refinance Agency Limited (MUDRA) scheme introduced by the Central Government, West Bengal, Karnataka, and Tamil Nadu are the top 3 states to receive the maximum number of loans. While the entrepreneurs belonging to the General category received 45% of the total number of MUDRA loans, the Other Backward Class (OBC) category were offered around 32% of the total loans under MUDRA scheme. On the other hand, businessmen belonging to the Schedule Castes (SC) received 18% and those from the Scheduled Tribes (ST) category were offered just 5% of the total MUDRA scheme loans.
As per a survey conducted by the National Sample Survey Organisation (NSSO) in 2017, the population of the OBC category amounts to 40.94% of the total population in India. While the SC population comprises 19.59% and the ST population is 8.63%, the rest of the categories make up for 30.80% of the total population of the country. The MUDRA loans were introduced by the government to offer financial aid to the non-corporate small business (NCSB) or informal segment in order to help them grow by taking care of their business needs while adding them into the mainstream.
As per the data presented by the finance ministry to the Lok Sabha, approximately 12 crore beneficiaries have enrolled for the Mudra scheme and a total amount of loans worth Rs.6 lakh crore has been disbursed by banks and other financial organisations till date. Out of the total number of loans offered, around 35% of the loans were given to entrepreneurs from Karnataka, Tamil Nadu, and West Bengal. 60% of the total loans disbursed in Himachal Pradesh, West Bengal, Andhra Pradesh, and Delhi were offered to business from the general category. In Tamil Nadu, Karnataka, Telangana, and Gujarat, 60% of the total sanctioned loans were given to the general-category entrepreneurs. On the other hand, the entrepreneurs from the OBC category outnumbered the loan beneficiaries from the general category in Jharkhand, Chhattisgarh, Odisha, and Madhya Pradesh. While Bihar is the only state wherein over 55% loan beneficiaries were from the OBC category, Meghalaya and Mizoram were the only 2 states in which ST loan beneficiaries outnumbered the rest of the categories.
14 August 2018
12.27 New Loan Accounts Opened Under the Mudra Yojana
3.49 crore new entrepreneurs have reaped the benefits of the Pradhan Mantri Mudra Yojana (PMMY). To date, over 12 crore loans have been sanctioned under the scheme. The PMMY was set up to help individuals from the non-agricultural sector by providing collateral-free loans to establish small businesses and enterprises.
Other scheme launched by the government include the Pradhan Mantri Rozgar Protsahan Yojana (PMRPY) set up to provide incentive to individuals who contribute the entire 12% of the EPF contribution. This scheme has benefitted over 61 lakh beneficiaries so far.
9 August 2018
L&T Finance Holdings Rural Loan Book Reaches Rs.19,000 Crore
Since the past 2 years, L&T Finance Holdings (LTFH) has been capilising on the healthy rural economy. The lending business of the financial services company has grown in that space from Rs.8,586 crore in June 2016 to the current Rs.19,000 crore by the end of June 2018. With the government delivering several macroeconomic shocks to the economy, financial services industry collections witnessed a decline during the FY 2017-18. The industry accepted 2017 to be an outlier year and the cash shortage experienced by people from the rural economy was particularly unfavourable. As per the data from the Central Statistics Office (CSO), the agriculture growth rate in terms of gross value added (GVA) witnessed a sudden reduction from 11.6% in FY 2016-17 to 4.6% in FY 2017-18.
While a number of businesses use data in order to communicate with their business strategy teams, and L&T Finance Holdings uses a data intelligence systems to conduct all tasks related to rural lending. This includes monitoring over 4 million micro-loan customers and 5 million total rural customers. Approximately 2 years ago, L&T Rural Finance planned to renew its business model while putting more emphasis on data intelligence. The algorithms under data intelligence helps create improved portfolios and takes better credit decisions by 40% as compared to human underwriters. This reduces individual staff discretion and manual intervention to a minimum. This has led the company’s front line staff working at 12,000 points of presence in the country to concentrate on developing relationships with clients and customers. This has helped them improve their local knowledge to further improve the data intelligence capabilities of the company.
7 August 2018
Bank Credit Increases to 12.44%; Deposits Increase by 8.15%
According to data from the RBI, bank credit has grown by 12.44% to over Rs.86 lakh crore in the fortnight to 20 July 2018. The same period recorded an 8.15% increase in deposits amounting to Rs.1,14,38,121 crore. In the same time frame for 2017, bank credit stood at over Rs.76 lakh crore while deposits stood at Rs.1,05,75,615.
The deposit seems to have grown at a slower pace when compared to the the increase in bank credit. Additionally growth was also noted in non-food bank credit, loans to agriculture, and personal loans by 11.1%, 6.5%, and 17.9% respectively.
7 August 2018
Mudra scheme for weavers - Tamil Nadu stands first
Tamil Nadu stands in the first position as far as the implementation of the Mudra Loan scheme for weavers is concerned. The statistics was for the 2016-17 and 2017-18 period, said the state minister for handlooms and textiles. The number of loans disbursed under the scheme were 18,488 during 2017-18, higher than that disbursed in 2016-17.
The Mudra loan programme was initiated by the Indian textile ministry, wherein large banks (run by states) offer concessional loans up to Rs.5 lakh to handloom weavers. This facility was extended across all states.
The state government of Tamil Nadu has set aside Rs.49,045 lakh for distributing free sarees and dhotis to weavers. Free electricity is also being provided to powerloom weavers, as funds worth Rs.43,644.45 lakh have been allocated for the same.
29 June 2018
Tamil Nadu Heads in Weaver Mudra Scheme Implementation
The Minister of Handlooms and Textiles, O S Manian, stated that Tamil Nadu is the forerunner in the implementation of the Weaver Mudra Scheme during the financial year 2017-18 and 2016-17. The scheme was proposed to offer coverage to 15,000 handloom weavers within the state during FY 2017-18. During this time, the state has worked tirelessly and disbursed 18,488 Mudra loans worth Rs.90.12 crore. On the other hand, a total of 17,031 Mudra loans worth Rs.82.38 crore were offered in 2016-17. For the current financial year, the government has allocated a corpus of Rs.49,045 lakh. In order to provide free electricity to the handloom weavers, the government has allocated funds of Rs.484.50 lakh while Rs.43,644.45 lakh has been earmarked for powerloom weavers. The government provides free electricity up to 750 units bimonthly to 1,24,877 powerloom units while 1,11,394 handloom weavers get 200 units of free electricity bimonthly.
20 June 2018