Maharashtra's MUDRA Loan Overdues Jump to Rs 6,736.6 Crore, Shishu Category Under Maximum Pressure
Outstanding dues under the Pradhan Mantri MUDRA Yojana (PMMY) in Maharashtra have witnessed a sharp escalation, reaching Rs 6,736.6 crore by the end of March this year. This marks a significant increase of Rs 1,120 crore from the previous year's figure of Rs 5,616 crore, as per data presented before the state-level bankers' committee in Chhatrapati Sambhajinagar.
Despite this concerning rise in overdue amounts, the share of non-performing assets (NPAs) or bad loans has remained relatively stable at around 11%. Bankers attribute this trend to the continuous flow of fresh loan disbursements under the flagship scheme, which helps dilute the overall NPA ratio.
Category-Wise Breakdown Reveals Varying Stress Levels
A detailed analysis of the three MUDRA loan categories shows disproportionate stress:
- Shishu Category (Loans up to Rs 50,000): This segment, designed for the smallest borrowers, exhibits the highest distress. While 21.7 lakh beneficiaries received loans totaling Rs 4,237.1 crore, a substantial Rs 1,313 crore in dues have remained unpaid for over a year. This indicates a pronounced weakness in repayment capacity among micro-entrepreneurs.
- Kishor Category (Loans between Rs 50,000 and Rs 5 lakh): Total disbursements in this mid-sized bracket stand at Rs 25,517 crore, with Rs 3,247 crore classified as overdue. The figures reflect growing financial stress among this borrower group.
- Tarun Category (Loans up to Rs 10 lakh & Extended up to Rs 20 lakh): This segment shows comparatively lower stress. Disbursements for standard Tarun loans are Rs 2,084 crore, while the extended category (up to Rs 20 lakh) has recorded lending of Rs 2,620 crore. Overdues here are limited to Rs 80 crore. Officials cite the category's recent introduction and smaller loan volumes as reasons for the better performance.
Urban Centers Lead in Overdue Accumulation
Geographically, major urban centers continue to account for a significant portion of the overdues. Pune reported the highest outstanding overdue at Rs 699 crore, followed by Mumbai at Rs 546 crore and Nagpur at Rs 474 crore.
Experts Flag Target-Driven Lending and Underlying Risks
Devidas Tuljapurkar, Joint Secretary of the All India Bank Employees Association and former director of Bank of Maharashtra, acknowledged the MUDRA scheme's strong potential for employment generation. However, he issued a stern warning that lending has become increasingly "target-driven."
"Without proper market assessment, supply chain evaluation, and borrower training, loans disbursed under pressure risk turning bad," Tuljapurkar cautioned.
He further raised concerns that reported NPAs might not reveal the full extent of the stress, alleging that loan restructuring and rescheduling could be masking underlying problems that may surface in the future.
Banking experts have also noted a critical trend: while MUDRA loan disbursements continue to rise annually, there is limited evidence of a corresponding increase in new enterprises. Instead, a significant portion of the additional credit appears to be flowing to existing borrowers. This practice adds to their debt burden and raises serious questions about the scheme's long-term sustainability and impact on genuine entrepreneurship.
The rising overdue figures in Maharashtra highlight the need for a more nuanced approach to micro-financing, balancing the imperative of credit access with robust risk assessment and post-disbursement support for borrowers.
