This was higher than the average MSME NPA rate of 3.60 per cent as of March 2025.
The NPA rate against the amount of loan disbursed under the Mudra scheme stood at 2.19 per cent as of March 2025, vis-a-vis 2.71 per cent as of March 2018. (Source: indianexpress)
The non-performing Asset (NPA) rate for scheduled commercial banks against outstanding amount under Pradhan Mantri Mudra Yojana (PMMY) has jumped from 5.47 per cent as of March 2018 to 9.81 per cent as of March 2025, Finance Minister Nirmala Sitharaman informed Parliament on Tuesday. This was higher than the average MSME NPA rate of 3.60 per cent as of March 2025.
The NPA rate against the amount of loan disbursed under the Mudra scheme stood at 2.19 per cent as of March 2025, vis-a-vis 2.71 per cent as of March 2018, the minister said in a written reply to a question in the Rajya Sabha.
The Mudra NPA rate, said Sitharaman, is higher than the average MSME NPA rate because the loans under the scheme are collateral-free and are often provided to new business entrepreneurs who may lack business experience and expertise.
“Further, the incidence of NPAs in lending to MSME sector, including PMMY, is attributable to a number of factors, which include overall performance of the borrowing entity, macroeconomic conditions, sectoral issues, global business environment etc.,” the minister said.
PMMY scheme mainly caters to those segments of society which have been outside the formal credit system because of a lack of collateral, business experience, etc, she said.
The scheme provides collateral-free loans of up to Rs 20 lakh to non-corporate, non-farm small and micro enterprises. The scheme supports a wide range of income-generating activities in sectors such as manufacturing, trading, and services, along with allied agricultural ventures like dairy, poultry, and beekeeping.
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It caters to the segments of the society which have been outside the formal credit system because of lack of collaterals, business experience etc.
Sitharaman added that the government has taken various steps towards the effective implementation of the Mudra Scheme, viz., publicity campaigns, simplification of application form, credit guarantee scheme, nomination of Mudra Nodal Officer, frequent reviews at various levels by the government and banks.
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