Skip to main content

Dalits, tribals, OBCs, 78% of India, get 37% of loan under Modi's MUDRA scheme for marginalized: FactChecker

Loan disbursal in 2017-18
By Our Representative
Contrary to the claim by India's saffron rulers, who recently said that 55% of all accounts opened under the Pradhan Mantri Mudra Yojana (PMMY or the Prime Minister’s Small Business Finance Scheme) belong to individuals from scheduled castes (SC), scheduled tribes (ST) and other backward classes (OBC), a top data analysis site has revealed that it is the general category which gained the most.
According to FactChecker, "Individuals in the general class received 63% of the total loan amount disbursed in 2017-18, followed by OBCs (22%), SCs (11%) and STs (4%). The breakdown in previous years shows minor fluctuations, but no significant change."
Even if considering that the BJP rulers' claim is true, says FactChecker, it is not enough. To quote from the analysis, "Together, SCs, STs and OBCs form 78.4% of the India’s population, so if 55% of PMMY accounts are in their name this is an under-representation." It adds, "The proportion of OBC, SC and ST groups accessing higher-value loan amounts has not increased since the scheme’s inception."
Further, it says, "The largest-value loans, of above Rs 10 lakh, have been given disproportionately to general category individuals, to the extent of 88.7%. And the average loan size, Rs 45,203, may be too small to have a meaningful impact on job creation."
The authorities' claim 
“Majority of loan amounts have been disbursed under the Shishu category, these are quite small to create a new business unit,” the top site quotes Happy Pant, head of advocacy at the Centre for Budget and Governance Accountability, a nonprofit, as saying.
Giving details of the PMMY scheme, the site says, it was launched by Prime Minister Narendra Modi in April 2015 to "improve access to microfinance for non-corporate, non-farm small/micro enterprises and stimulate job creation. Individuals can apply to private or public banks for loans of up to Rs 10 lakh without having to provide collateral."
The scheme was launched against the backdrop of a large number of micro and small enterprises in India belonging to marginalised groups, who lack access to formal credit. Forced to deal mostly in cash, it was felt, they were forced rely on informal sources of finance such as small-time moneylenders who often charge 60%-100% interest.
Yet, FactChcker notes, under MUDRA, "majority of loan amounts disbursed under the two highest-value categories – Kishor (loan value between Rs 50,000 and Rs 5 lakh) and Tarun (Rs 5-10 lakh) – went to those in the general category, and by a substantial margin."
It adds, "In fact, the percentage share of loan amounts disbursed to the general class under the Kishor category has increased from 73.7% in 2015-16 to 76.8% in 2017-18. Similarly, under the Tarun category, loan amounts disbursed to general category account holders have risen from 83.6% in 2015-16 to 88.7% in 2017-18."
"However", regrets FactChecker, "The average size of a MUDRA loan since the scheme’s inception is just Rs 45,203. No more than 1.4% of loans disbursed have been larger than Rs 5 lakh, according to MUDRA data."
It adds, "Commentators have questioned whether the small size of the average loan can enable employment generation and economic growth. Some critics have also pointed out that most self-employed people may not have full-time work – they may actually be underemployed."
Loan distribution under the highest category, Tarun, Rs 5-10 lakh
It quotes Pant as saying, “It is difficult to understand how important MUDRA is as a source of job creation, since no count of the number of ‘created’ jobs exists. There is no formal data on employment generated due to these loans.”
While MUDRA is supposed to boost the government’s job-creation credentials, the site says, "When FactChecker asked the MUDRA Head Office to share data on jobs directly created through the disbursement of loans under the scheme, they were unable to provide any."
“The details of jobs generated under the scheme are not being captured on the MUDRA portal,” said Ramakant Babu Rahate, deputy general manager at MUDRA, in an email response to FactChecker. “However, the portal captures data pertaining to new loan accounts/entrepreneurs. Total 3.50 crore new entrepreneurs have availed loans under MUDRA Yojana in last three years.”
"This response was based on the assumption that the number of loan accounts opened equals the number of entrepreneurs, which may be inaccurate", comments the site.

Comments

TRENDING

World Bank clarifies: Its 26th rank to India not for universal access to power but for ease of doing business

By Our Representative
In a major embarrassment to the Government of India, the World Bank has reportedly clarified that it has not ranked India 26th out of 130 countries for providing power to its population. The top international banker’s clarification comes following Union Power Minister Piyush Goyal’s claim that India has “improved to 26 position from 99” in access to electricity in just one year.

"Misleading" satellite images being shared on Balakot surgical strike on Jaish camp

By Dr Vinay Kate*
With every passing day more questions are being raised about the surgical strike India did in Balakot as a response to Pulwama attacks. So far the Indian media has claimed mass casulaty of 300+ terrorists of Jaish-e-Mohammad in this surgical strike, but there is hardly any report from foreign media about the same.

Extreme repression, corporate loot, cultural genocide "characterise" India's tribal belt

Counterview Desk
As Lok Sabha polls approach, there is considerable ferment in one section of the population -- India's Adivasis, forming about 8.6 per cent of India's population. Things became particularly critical following the February 14, 2019 Supreme Court order, allegedly seeking to evict lakhs of tribals from their forest lands.

Industry in India "barely growing", export growth 0%, whither moral anchors?

Counterview Desk
In a sharp critique of the Modi government, the Indian Institute of Management-Ahmedabad (IIM-A), one of world renowned economist Prof Kaushik Basu, who is Professor of Economics and Carl Marks Professor of International Studies at Cornell University, has told students at the IIM-A’s 54th Annual Convocation on March 16, 2019 that they have a “special responsibility” on their shoulders, “the responsibility to reject narrow sectarianism, uphold scientific thinking, openness to new ideas, and freedom of speech.”

Gujarat model? Industrial effluents "invade" borewells, discharge coloured water in farms

By Rajiv Shah
In a major embarrassment for Gujarat model, of the 21 samples taken by officials of the state government's environmental watchdog Gujarat Pollution Control Board (GPCB) in two villages of Vadodara district and analyzed by its laboratory in Gandhinagar, the state capital, to find out pollution level in groundwater, 16 were assessed as highly contaminated – these were, in fact, found to be discharging reddish, brownish, reddish, or yellowish water.

Refugees as criminals? US govt report blames Amit Shah for calling Bangladeshis termites

Counterview Desk
The chapter “Freedom of Movement” of the US State Department’s “India 2018 Human Rights Report”, released recently, has criticized BJP chief Amit Shah for terming alleged Bangladeshis who may be in Assam as “termites”, because their names were struck down from the list of National Register of Citizens, under preparation in the state.
Pointing out that four million residents were excluded from Assam’s final draft list, leading to “uncertainty over the status of these individuals, many of whose families had lived in the state for several generations”, the report regrets, the Indian law does not even contain the term “refugee,” treating refugees like Rohingiyas as “any other foreigners.”
“Undocumented physical presence in the country is a criminal offense. Persons without documentation were vulnerable to forced returns and abuse”, the report says.
Text of the Freedom of Movement chapter: The law provides for freedom of internal movement, foreign travel, emigration, a…

Congress would win just 9 of 26 Lok Sabha seats: Gujarat Assembly segment-wise analysis

By Rajiv Shah
Even as the Congress plans its first working committee meet in Gujarat on February 28 after an almost 58 year gap, there is reason to wonder what is in store for India’s grand old party in a state which has been long been a BJP bastion – in fact ever since mid-1990s. Ahead of the then assembly polls in late 2012, talking with me, a senior Gujarat Congress leader, currently Rajya Sabha MP, frankly said he saw no reason why Congress would win.

"Pro-corporate" Supreme Court order on FRA would further marginalize Adivasis

By VS Roy David, JP Raju*
For millions of Adivasis and other traditional forest dwellers February 13, 2019 will go down in history as the day of apocalypse. This is like the proverbial Black Friday where millions of most marginalized people of India were ordered by malicious anti-people draconian Supreme Court order depriving them the life and livelihood by evicting them from their habitats.

Financial inclusion? Not micro-loans; India's poor "need" investment in health, education

By Moin Qazi*
India has grown into a global powerhouse. Its economy is soaring but the picture on the ground is still quite arid. The green shoots that you see are only a patch of its landscape. Most Indians are hapless victims of inequity. India is one country where intense poverty abounds in the shadow of immense wealth.

India, Pakistan told to eliminate nuclear weapons: N-war "would kill" 2 billion

Counterview Desk
The International Physicians for the Prevention of Nuclear War (IPPNW), a non-partisan federation of national medical organizations in 64 countries, representing tens of thousands of doctors, medical students, other health workers, and concerned citizens, claiming to share the common goal of creating a more peaceful and secure world freed from the threat of nuclear annihilation, has warned that “an unprecedented global catastrophe” awaits the globe against the backdrop of warmongering in India and Pakistan.