Crisil SME tracker: Asymmetric Mudra loan disbursals have risk implications

Cumulative sanctions by lenders under scheme topped Rs 3 lakh cr in past two financial years

A QUICK ANALYSIS of disbursements under the Pradhan Mantri Mudra Yojana (PMMY) during the first two years reveals asymmetrical growth, which, if unchecked, could heighten credit risks for banks. PMMY, commonly referred to as the MUDRA scheme, was launched in April 2015. It is aimed at bringing the unfunded micro and small enterprises (MSEs) into the formal financial system and improving their access to affordable credit.
 
Cumulative sanctions by lenders under the scheme topped Rs 3 lakh crore in the past two fiscal years (Chart 1). However, in a marked asymmetry, more than 50 per cent of the sanctions