Modi govt scores a hat-trick; achieves Mudra loan target of Rs 3-lakh crore in FY19

Modi govt scores a hat-trick; achieves Mudra loan target of Rs 3-lakh crore in FY19

Prime Minister Narendra Modi’s flagship scheme Pradhan Mantri Mudra Yojana (PMMY) has for the third successive year accomplished its annual lending target of Rs 3 lakh crore in FY 2018-19. The government had set this ambitious target in the last year’s Budget. Small loans worth more than Rs 3.21-lakh crore have been ratified in 2018-19 under the PMMY scheme as against the set target of Rs 3-lakh crore, according to the latest official data. Furthermore, loan disbursement also crossed the target mark at around Rs 3.12-lakh crore, the Financial Express reported.

The target at the outset seemed difficult to be accomplished as it was a leap of nearly 23% over the FY 2017-18 goal. Meanwhile, in the last eight days of the previous fiscal, loans worth around Rs 18,000 crore were sanctioned under the Modi government’s flagship scheme to ensure that the target was met for the third year running, the Financial Express reported.


“We have already crossed the [Rs 3-lakh crore] target. In the next week or so, we will officially release the data,” a senior official in the department of financial services told the daily.

This translated to Mudra loans worth Rs 4,500 crore being sanctioned daily over the last four working days in March. In comparison, the average rate of sanction of Mudra loans reportedly stood at Rs 970 crore per working day for the whole financial year, the daily added.

The scheme, launched on April 8, 2015, offers loans up to Rs 10 lakh for non-agricultural activities although activities allied to agriculture, such as dairy, poultry, beekeeping, and the like are covered. Mudra loans are classified into three categories depending on the beneficiary unit’s growth stage and funding needs.


While ‘Shishu’ covers loans up to Rs 50,000, the Kishore category covers loans above Rs 50,000 and up to Rs 5 lakh, and Tarun for higher loan amounts. These loans are given bycommercial banks, RRBs, small finance banks, cooperative banks, MFIs and non-banking financial companies.

In 2016-17, the government had set a target of Rs 1.80-lakh crore for the Mudra scheme, and while the total amount of sanctioned loans in that financial year exceeded the target, the disbursed amount had fallen short by nearly Rs 5,000 crore. In the following fiscal, the amount of disbursed loans exceeded the specified target of Rs 2.44 lakh crore by over Rs 2,000 crore.

Interestingly, former RBI governor Raghuram Rajan had red-flagged Mudra loans for potential credit risk in September 2018. And in February, the government informed Parliament that loans worth Rs 7,277.31 crore of public sector banks under the Mudra scheme had turned bad at the end of March 2018. In the first nine months of the last fiscal, the figure reportedly swelled to over Rs 14,930 crore.