Issues :

  • The share of loans to micro and small enterprises has come down from 13.33% at the end of fiscal year 2014-15. The year-on-year growth in such loans too is slowing down.
  • Relevance of the Mudra scheme is in the refinance support that the Mudra agency extends toward such disbursals. The progress here leaves much to be desired.
  • Banks are wary of lending to small borrowers due to the bad loan rates in this segment.
  • There are number of already existing refinancing agencies.
  • There can be confusion due to variable interest rates.
  • Minority sector is still lagging behind
  • 6% of all loans disbursed by non-banking financial corporations (NBFC) under the MUDRA scheme has been in the Shishu category, with a ticket size of less than Rs 50,000, in financial year 2015-16, according to data from agency’s website.

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