2 out 410 applications approved under Mudra Scheme; Banks’ negligent in providing loans allege Micro industrialists

Coimbatore: Micro industrialists have complained that under 'Mudra' scheme loans are not sanctioned properly to the micro industries. In spite of collector’s request, the public sector banks are not showing interest in lending loans.

Micro industries play a vital role in contributing a major share in the Indian economy. It also provides more employment opportunities. Considering the importance of this sector, the Prime Minister launched the 'Mudra' scheme "Pradhan Mantri Mudra Yojana (PMMY)" on April 8, 2015. It is a flagship scheme of the Government of India to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them.

It enables a small borrower to borrow from all Public Sector Banks such as PSU Banks, Regional Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI) and Non Banking Finance Companies (NBFC) for loans upto Rs 10 lakhs for non-farm income generating activities.

This scheme gave the micro-industries a big hope. But after implementation, the difficulties in getting loans has made the micro industrialists upset. Tamil Nadu Association for Cottage and Micro Enterprises (TACT) district president, J James said, "As per this scheme loans should be distributed without collateral security. Whereas in reality most of the banks ask collateral security from the applicants. In spite of submitting the applications huge delays are witnessed in getting loans. To be frank the bank officials are not interested in lending loans in this scheme. Since this issue is affecting us very badly, on behalf of all micro industries, we spoke in the interaction meeting held between with the bank officials in which the district collector presided over."

He further said, "Understanding the difficulties of the micro industrialists, the collector requested the bank officials to ensure all the applicants are benefited under Mudra scheme. Following this, on behalf of a group of industry associations we submitted 410 applications under Mudra scheme and till now only 2 industrialists have got Rs 50,000 loan each. This clearly shows the negligence of the bank officials in lending loans. There are more than 30,000 micro industries functioning across the district and at present all of them are reeling under the financial crisis post 'Covid-19' outbreak. If the bank officials show more interest in lending loans under Mudra scheme it will be very helpful."

Coimbatore District Lead Bank Manager, S. Venkataramanan refuted the claims and said, "This scheme is introduced mainly to fulfill the loan requirements of the small traders, roadside vendors etc. Those who are eligible are availing the loans irrespective of whether they belong to service sector or manufacturing sector. Already many micro industrialists of the manufacturing sector have availed loans under this scheme."