Government to disburse Rs1,22,000-cr loan under MUDRA by March

The government has targeted to disburse Rs1,22,000 crore in loans to micro and marginal businesses under the Micro Units Development and Refinance Agency (MUDRA) scheme by the end of the current fiscal, union minister of finance and corporate affairs Arun Jaitley said today.

Jaitley announced this at a function to hand over the loan sanction letters to micro entrepreneurs at a mega credit campaign under the MUDRA scheme, organised by the Punjab National Bank, in New Delhi.

Jaitley said till now about Rs24,000 crore has been disbursed under the scheme to about 3.7 million 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 Rs1,22,000 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 said by disbursing Rs1,22,000 crore by March 2016, the government hopes to cover around 12.5-17.5 million small business units under MUDRA loans.

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 Rs5,000 crore to provide capital to all banks seeking refinancing of small business loans under PMMY.

PMMY loans fall into three categories - Shishu (up to Rs50,000), Kishore (Rs50,000-Rs5 lakh) and Tarun (Rs5-10 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 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.