The government targets to disburse Rs. 1.22 lakh crore loan to micro and marginal businesses under MUDRA scheme by the end of the current fiscal, Finance Minister Arun Jaitley said on Friday.
Launching a mega credit drive under the MUDRA scheme at a PNB event, Jaitley said till now as much as Rs. 24,000 crore has been disbursed under the scheme to about 37 lakh small entrepreneurs.
“MUDRA is about funding the unfunded segment. MUDRA has the objective of facilitating the small segment as per their requirements.”
“We are targeting a loan disbursal of Rs. 1.22 lakh crore from the banking system to these small entrepreneurs by March 2016 so that they can establish some or other kinds of business and create new jobs,” Jaitley said.
The Finance Minister also handed over loan sanction letters to several entrepreneurs during the Mega Credit Campaign organised by Punjab National Bank.
He said the government aims to cover around 1.25-1.75 crore small business people under MUDRA to disburse this sum of Rs. 1.22 lakh crore by March 2016.
Jaitley also said these people will be exempted from furnishing any kind of bank guarantee to avail of loan under this facility.
“These poor people need not give loan guarantee, neither they have resources to give the security. We have given them this facility.
“We want to encourage crores of new entrepreneurs in the country. They will not be dependent on any kind of doles, but would be encouraged to stand on their own feet by these kinds of facilities,” he added.
MUDRA has been established as a subsidiary of SIDBI with an initial corpus of Rs. 5,000 crore to provide capital to all banks seeking refinancing of small business loans under PMMY.
PMMY loans fall into three categories – Shishu (up to Rs. 50,000), Kishore (Rs. 50,000-Rs. 5 lakh) and Tarun (Rs. 5-10 lakh).
Jaitley also said loans under MUDRA will not be given on favoritism, rather bank officials will see how these small entrepreneurs will use the amount, based on which they will be entitled to get the loan.
“This money will not be a fair (mela) to give away money of state and private banks. It will be linked to business and related projects. Beginning a campaign today till October 2, we will take this loan programme forward to make it more popular,” he added.
The current focus of the government is on Shishu category of micro loans, which encompass a range of small activities like shop-keepers, fruit sellers, vegetable vendors, mechanics, barbers, cobblers, small manufacturing units and a lot of other small service sector enterprises which borrow from money lenders and informal sources.
