The Mudra scheme has missed its mark. Originally meant to help small entrepreneurs start their own business and generate jobs, only one-fifth of loans sanctioned under the scheme were invested in new ventures.
According to a draft report on Pradhan Mantri Mudra Yojana (PMMY), which is yet to be made public, a little over 20 per cent of the total loans under the scheme were used to start new businesses. More than 80 per cent of Mudra loans were used by beneficiaries to expand their businesses.
Out of 94,375 beneficiaries surveyed for the draft report, 19,396 used the loan to start new businesses. This constitutes 20.6 per cent of loans given under the Mudra scheme. The report said that a total of Rs 5.71 lakh crore was sanctioned in loans between April 2015 and December 2017 through 12.27 crore loan accounts.
As per data released last year, 22 per cent of loans were utilised to start new businesses, whereas the remaining 78 per cent went to business expansion.
As per the report, around 42 per cent loans disbursed were under Mudra scheme were in the Shishu category, which includes loans up to Rs 50,000. Kishor category, which has represents loans worth Rs 50,000 to Rs 5 lakh, comprises 34 per cent of loans. A total of 24 per cent loans were disbursed under Tarun category, which includes loans amounts of Rs 5-10 lakh.