New Delhi: To fund the unfunded, the Finance Ministry plans to launch a month long campaign for loans under Pradhan Mantri Mudra Yojana in the next 10 days and hopes to double loan disbursement to the small business sector to over Rs 1 lakh crore during the fiscal.
"We have fixed up target for public sector banks, private sector banks, regional rural banks and foreign banks under Pradhan Mantri Mudra Yojana (PMMY) and we are expecting that the loan disbursement in this segment would double compared to last year. It will exceed Rs 1 lakh crore to small business segment in this financial year," Financial Services Secretary Hasmukh Adhia told PTI.
Since the launch of the scheme in April by Prime Minister Narendra Modi, about Rs 14,000 crore worth of loans have been disbursed under the scheme to 20 lakh people.
"In a month of September we are planning a campaign in which we hope to cover 20-25 lakh new loans during the month itself," he said.
The PMMY provide loans between Rs 50,000-Rs 10 lakh to small entrepreneurs. The Micro Units Development and Refinance Agency Ltd (MUDRA) focuses on the 5.75 crore self-employed who use funds of Rs 11 lakh crore and provide jobs to 12 crore people.
Under PMMY campaign, he said, loans up to Rs 50,000 are planned to be given to small businesses in informal sector such as vegetable vendors, barbers, rickshaw pullers, service sector units like auto repairs, plumbing and electricians etc.
The secretary further said that a very easy form has been designed for availing this loan with about 12 per cent annual interest rate.
So, for small businessman, the loans which is calculated on daily basis is available at 1 per cent per month interest rate across all bank branches, he added.
Part of the loan will be given for working capital in form of MUDRA credit card, on which interest will be charged only on amount used, Adhia said.
Three products are available under the PMMY namely Shishu, Kishor and Tarun to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur.
Shishu covers loans up to Rs 50,000 while Kishor covers above Rs 50,000 and up to Rs 5 lakh. Tarun category provides loans of above Rs 5 lakh and up to Rs 10 lakh.
