The official figures have finally revealed that what was an open secret until now – the pandemic has hit hard the less privileged section of society.
PMMY or MUDRA as it is known is a kind of credit facility typically provided to small and medium enterprises engaged in manufacturing, trading, or services. In its penchant for acronyms, MUDRA is coined to say Micro Units Development and Refinance Limited.
There has been a sharp increase of over 54 % noted in the NPA figures pertaining to Mudra loans in Gujarat. Mudra loans are offered under three categories named Shishu, Kishor, and Tarun. The loan amount under Shishu is up to Rs. 50000 whereas to Kishor and Tarun, it is Rs. 50000 to Rs.5 lacs and Rs. 5 lacs to Rs.10 lacs respectively.
The NPA increase in the Shishu category is a massive 159%, in the Kishor category 35%, and the Tarun category 52%, indicating the difficulties the small entrepreneurs are facing. The total increase in NPA figures from last year is overall 54% from Rs 555.54 crores to Rs 856.52
Gujarat State Level bankers’ Committee’s Chairman has informed that micro-business has been hit harder as they do not have adequate capital or contingency fund to stay afloat in times like pandemic.
During the lockdown, many people lost their jobs or source of income. The unexpected and often exorbitant medical expenses derailed many calculations of honest borrowers. The weakened repayment capacities spiraled into gaps that could not be bridged.
These percentages must also be seen in the light of the face during the period of comparison. The fresh disbursement has been a dismal 9% only and the fact that MUDRA loans are mandated to be collateral-free loans.
