Out of Rs 20,000 crore corpus, Mudra Bank has disbursed just Rs 1,500 crore to banks and micro finance institutions so far.
Mudra Ltd, formed by the government to refinance banks and other micro finance institutes for small loans, has turned out to be a non-starter with only a handful of PSU banks taking funding support from it.
Since its launch, the Micro Units Development and Refinance Agency Ltd (Mudra), has been able to garner just about Rs 1,500 crore of refinancing.
Of this, just about three banks – Indian Overseas Bank, Bank of Maharastra and State Bank of Travancore – have taken around Rs 800 crore while another Rs 400-500 crore has gone to micro-finance institutions.
"We have so far disbursed Rs 1,500 crore till date. This is to start with, we have a long way to go," said Jiji Mammen, CEO, Mudra Bank, on the sidelines of a microfinance sector event in Kolkata.
This is in sharp contrast to Rs 75,000 crore disbursed by the entire banking system to nearly 1.73 crore people under the Pradhan Mantri Mudra Yojana (PMMY) so far since the launch of the scheme in April last year.
The poor start of the Mudra Ltd, which last week got approval of the Cabinet to get converted into a bank, is the restrictions on lending put on it.
"We are extending refinance at 6.72% and those banks taking funds from us can't lend at rates higher than base rate, and this must be the factor which is holding them back. Many banks may not like to do that and may not come to us," Mammen said, adding that such banks and MFIs have alternative sources of funds to fall back on.
Mudra Ltd has a corpus of Rs 20,000 crore, and since just Rs 1,500 crore has been exhausted out of it, Mammen does not see any need to raise funds in near future. "As of now, we have been given Rs 20,000 crore, and so have adequate cushion for couple of years."
Out of the Rs 75,000 crore of loans extended by the banking system under the scheme, 50% has been given to new entrepreneurs while the remaining has gone to units extending their businesses, which is also another mandate for the Mudra scheme, he said.
PMMY loans fall into three categories, ranging from below Rs 50,000 up to Rs 10 lakh.
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