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- The government’s MUDRA scheme to finance small and micro borrowers has witnessed an increase in bad loans at a time when the system-wide non-performing assets(NPAs) have started showing signs of a decline.
- NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.
- The NPAs under MUDRA or Micro Units Development and Refinance Agency Ltd has increased by 68.7% to Rs 16,480 crore for the financial year ended March 2019 from Rs 9,769 crore a year-ago.
- However,NPA’s under the MUDRA scheme are much lower than the total system-wide NPAs.The banking sector’s gross NPAs declined to 9.3% in March 2019 which is much faster than the Reserve Bank of India’s estimate.
- Pradhan Mantri MUDRA Yojana (PMMY) was launched in 2015.It seeks to extend affordable credit to micro and small enterprises.Loans up to Rs.10 lakh are extended to non-corporate, non-farm enterprises.These loans are classified as MUDRA loans.
- Loans under Mudra are given under different categories viz. ‘Shishu’, ‘Kishor’ and ‘Tarun’.These categories are based on the stage of growth or development and funding needs of the beneficiary.
- Sishu covers loans up to Rs. 50,000.Kishore covers loans above Rs. 50,000- and up to 5 lakh.Tarun covers loans above Rs. 5 lakh and up to Rs.10 lakh.



