By: Priyanka Saurabh
Under the Pradhan Mantri Mudra Yojana, there is a provision for non-banking financial companies and microfinance institutions to give loans to small and medium traders without any security. This loan is given to promote employment by promoting small businesses in the non-agricultural sector. Recently, a 2 per cent interest rebate has been sanctioned on early repayment of infant loans under Pradhan Mantri Mudra Yojana for 12 months. The business of ‘micro and small enterprises’ has been badly affected due to the lockdown imposed under the Kovid-19 epidemic. This has greatly affected the repayment capacity of these enterprises. Therefore, these traders are more likely to default on their loans and convert them into non-performing assets, which may adversely affect their access to institutional loans in the future.
The implementation of the scheme will help micro and small enterprises to cope with the financial difficulties caused by the Covid-19 epidemic. The scheme will help small businesses to continue their operations without retrenchment.
Pradhan Mantri Mudra Yojana was launched on April 8, 2015, to provide loans up to Rs. 10 lakhs to non-corporate, non-agricultural micro/micro-enterprises. These loans are provided by commercial banks, regional rural banks, microfinance banks, microfinance institutions, and non-banking financial companies. Under Pradhan Mantri Mudra Yojana, three types of loans were arranged: loans for children up to Rs. 50,000, loans up to Rs. 50,001 to 5 lakhs for teenagers, loans up to Rs. 500,001 to 10 lakhs for youth. Mudra Company has been established as a wholly-owned subsidiary of the Small Industries Development Bank of India with a contribution of 100% capital. At present, the authorized capital of the currency company is 1000 crores and the paid-up capital is 750 crores. Currency loans are available for non-agricultural activities up to Rs. 10 lakhs and for agricultural-related activities such as dairy, poultry, beekeeping, etc.
If you want to start your own small business or own business but you do not have enough funds, you can apply for Pradhan Mantri Mudra Yojana and get a loan of Rs. 50,000 to Rs. 10 lakhs and start your own business. Can. Prime Minister Narendra Modi had launched the Pradhan Mantri Mudra (Micro Units Development and Refinance Agency Scheme) in Delhi to help small entrepreneurs in the country. Given to vendors, traders, shopkeepers, and other businesses. With a currency loan, you can also start a taxi-transport business. Also if you want to set up a small unit you can take a loan to buy machinery and raw materials etc. can go.
Recently, the Money Waiver Scheme will apply to loans that were outstanding till March 31, 2020, and have not gone as a non-performing asset on March 31, 2020, and during the period of the scheme. Note that it will also include loans that were earlier classified as ‘non-performing assets’ but may later be included as non-performing assets. The estimated cost of the rebate scheme will be around Rs 1,542 crore which will be borne by the Government of India from its account.
The current rebate will undoubtedly reduce financial stress for borrowers. At the same time, it will encourage those who will repay their loans regularly. The debt relief scheme provided under Mudra Yojana in times of crisis due to the Covid-19 epidemic will help to continue its work which will also have a positive impact on the economy and the country’s economic recovery will get a boost. Pradhan Mantri Mudra Yojana is the support of the poor; the sinking economy has got an edge!! (The writer is a Research Scholar in Political Science, a Poetess, Independent journalist, and a columnist)