Nearly 3% of Mudra loans turn into bad loans: Govt

The government said close to 3 per cent of Rs 6.04 lakh crore worth of loans sanctioned under the 'Pradhan Mantri Mudra Yojana' (PMMY) has turned into bad loans.

Prime Minister Narendra Modi launched the PMMY on April 8, 2015, for providing collateral free loans of up to Rs 10 lakh to non-corporate, non-farm small/micro enterprises with a view to generating employment, and providing access to easy finance to small enterprises.

In a written reply to a question on the PMMY in the Rajya Sabha, Minister of State for Finance Anurag Thakur also said any complaint received in respect of implementation of the PMMY, including turning down of loan applications, delay in turn-around-time (TAT) and lenders' insisting on collateral/guarantor on certain occasions, are redressed in coordination with the respective banks.

"Scheduled Commercial Banks (SCBs) and Regional Rural Banks (RRBs) have reported that as of March 2019, against a total amount of Rs 6.04 lakh crore disbursed by them under PMMY since inception of the scheme, an amount of Rs 17,251.52 crore had turned into Non-Performing Assets (NPAs), which is 2.86 per cent of the total disbursed amount," the minister said.

Loans are classified as MUDRA under the PMMY. The loans are given under three categories of Shishu, Kishore and Tarun to signify the stage of growth and funding needs of the beneficiary.