Backward classes ignored, majority of loans under Mudra Yojana go to general category

The Bharatiya Janata Party (BJP) had claimed that up to 55 per cent of all accounts opened under the Pradhan Mantri Mudra Yojana (PMMY or popularly known as Mudra Yojana) or the Prime Minister’s Small Business Finance Scheme belong to people from scheduled castes (SC), scheduled tribes (ST) and other backward classes (OBC).

However, as opposed to what the BJP claims, 63 per cent of the total amount of loans disbursed in 2017-18 has gone to individuals from the general category. The information was revealed by FactChecker after having accessed government statistics.

The scheme has many other loopholes as well and how it misses out on several important points.

The two-highest value categories – Kishor (ranging between amount of Rs. 50,000 to Rs. 5 lakh) and Tarun (Rs. 5-10 lakh) have been majorly given to those belonging to the general category. Not just this, 88.7 per cent of the loans of above Rs. 10 lakh have also been given to individuals belonging to the general category.

Under both, Tarun and Kishor categories, this disbursement of loans to the general category has only increased.

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While, there was an increase from 73.7% in 2015-16 to 76.8% in 2017-18 in the percentage of loans disbursed to the general category under the Kishor category, the percentage increase in loan amounts disbursed to the general category under the Tarun category was 88.7% in 2017-18 from 83.6% in 2015-16.

Apart from this, if one observes the yearly pattern of disbursement, the proportion of OBC, SC and ST groups accessing higher-value loan amounts has not increased since the scheme’s launch in 2015.

The Pradhan Mantri Mudra Yojna, popularly known as the MUDRA Yojana, was launched by Prime Minister Narendra Modi in April 2015 to improve access to microfinance for non-corporate, non-farm small/micro enterprises and stimulate job creation.

Under the scheme, individuals can apply for loans up to Rs. 10 lakh without having to provide collateral, and which can be used by them to start their business activities such as buying equipments, or other business-related needs.

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