The government’s micro loan scheme, going by the moniker Pradhan Mantri Mudra Yojana, has disbursed Rs1.53 trillion worth of loans so far in 2016-17, which represents a 15.04% growth from the previous fiscal year. Recall that in fiscal year 2016 (FY16), when the scheme was first implemented, disbursements had exceeded the target specified by that year’s budget. In FY16, Mudra extended refinance worth about Rs3,000 crore to banks, which is chump change compared to the micro and small loan portfolio of the lenders. The share of small and micro loans in total credit to industry has reduced to 12.55% this year (FY17) from 13.33% in FY15. The main business of an MFI is micro loans and this sector has been growing by leaps and bounds.

Source: Mint March 28, 2017 02:15 UTC