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Fact Check: Do Women make up for more than 70% beneficiaries of Mudra loans?

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In this article, we fact check some numbers related to the MUDRA scheme and the Stand Up India scheme.

The government made certain claims about its commitment to social justice in an infographic titled ‘promoting entrepreneurship for socio-economic empowerment’. The following article is a fact check of the data provided in the infographic.

What is the MUDRA scheme?

Pradhan Mantri MUDRA Yojana (PMMY) is a scheme launched by the Prime Minister in April 2015 for providing loans up to Rs. 10 lakh to the non-corporate, non-farm small/micro enterprises. These loans are classified as MUDRA loans under PMMY. These loans are given by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs. The borrower can approach any of the lending institutions mentioned above or can apply online through the portal.

However, it has to noted that the focus on the MSME sector is not a new phenomenon. The first NDA government launched the Credit Guarantee Fund Scheme for MSMEs in August 2000 to provide guarantee cover for collateral free credit facilities extended to micro and small enterprises (MSEs). During the UPA, the Government had constituted a Prime Minister’s Task Force on Micro, Small & Medium Enterprises (MSME) in September 2009, which submitted its report in January 2010. The report had made recommendations in the areas of credit, marketing, labour issues, rehabilitation and exit policy, infrastructure/technology/skill development, taxation and special measures for North-Eastern Region and Jammu & Kashmir.

Among other things, the recommendations of the task force also include advice to the banks to achieve a 20% year-on-year growth in credit to MSEs and a 10% annual growth in the number of micro enterprise accounts.  The banks have also been advised that the allocation of 60% of the MSE advances to the micro enterprises is to be achieved in stages viz., 50 per cent in the year 2010-11, 55 per cent in the year 2011-12 and 60 per cent in the year 2012-13. Many other steps were also recommended and some were implemented during the previous government. PMMY being implemented by the current government is a dedicated scheme for MSEs that led to the establishment of Micro Units Development & Refinance Agency Ltd (MUDRA). MUDRA bank is essentially a refinancing institution and does not directly lend loans to end customers. Rather, the loans are given by Commercial Banks, RRBs, Small Finance Banks, Cooperative Banks, MFIs and NBFCs.

Has the lending target under MUDRA scheme been increased?

The first claim is that the lending target under the MUDRA scheme has been enhanced to 3 lakh rupees for the financial year 2018-19. In Union Budget speech (2018-19), Arun Jaitley said ‘it is proposed to set a target of 3 lakh crore for lending under MUDRA for 2018-19 after having successfully exceeded the targets in all previous years’.

Claim: The lending target under the MUDRA scheme has been enhanced to 3 lakh rupees for the financial year 2018-19.
Fact: It is proposed to set a target of 3 lakh crore for lending under MUDRA for 2018-19. Hence, the claim is TRUE.

What is the demographic division of MUDRA account loans?

The second related claim is that ‘of the total loan accounts (under the MUDRA scheme), 76% are of women and over 50% are SCs, STs and OBCs’.

The PMMY website has year wise performance reports on the website. Data from these reports suggests that out of a total of 12.27 crore loan accounts under the MUDRA scheme between 2015-16 and 2017-18, 9.03 crore belong to women entrepreneurs and 6.71 crore belong to SCs/STs/OBCs. Hence the percentage of loan accounts belonging to women is around 74% while those belonging to SCs/STs/OBCs is around 55%.

Claim: of the total loan accounts (under the MUDRA scheme), 76% are of women and over 50% are SCs, STs and OBCs.

Fact: Data from performance reports of PMMY suggests that out of a total of 12.27 crore loan accounts under the MUDRA scheme between 2015-16 and 2017-18, 9.03 crore belong to women entrepreneurs and 6.71 crore belong to SCs/STs/OBCs. Hence the percentage of loan accounts belonging to women is around 74% while those belonging to SCs/STs/OBCs is around 55%. Hence the claim is TRUE.  However, it has to be noted that focus on the MSE sector is not a new phenomenon.

What is the Stand-up India scheme?

Government of India launched the Stand Up India scheme in April 2016. Stand Up India scheme caters to promoting entrepreneurship amongst Women, SC & ST category i.e. those section of the population facing significant hurdles due to lack of advice/ mentorship as well as inadequate and delayed credit. The scheme intends to leverage the institutional credit structure to reach out to these underserved sectors of the population in starting greenfield enterprise. It caters to both ready and trainee borrowers. The Scheme facilitates bank loans between Rs.10 lakh and Rs.1 crore to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one Woman borrower per bank branch of Scheduled Commercial Banks for setting up greenfield enterprises in trading, manufacturing and services sector. 51% of the shareholding and controlling stake has to be held by an SC/ST of woman entrepreneur in case of a non-individual enterprise.

To extend collateral free coverage, Government of India has set up the Credit Guarantee Fund for Stand Up India (CGFSI). The scheme is built on the concept of providing handholding support to those borrowers who might have a project in mind but lack the confidence and capability to start up. It also provides for convergence with Central/State Government schemes. Applications under the scheme can also be made online. An online tracking system in the dedicated Stand Up India portal is being utilized.  As of December 2018, more than 68000 loans have been sanctioned under the scheme out of which 53,284 are disbursed.

How many loans were sanctioned under the Stand-up India scheme?

The third claim is that, ‘under Stand up India mission, 54,733 loans were sanctioned by the banks to SC, ST and women borrowers (up to February 2018)’.

The annual report  (2017-18) of the Department of Financial Services, published in March 2018 puts this number at 50887. This data was till the 10th of January 2018 only. More updated data was provided in a Lok Sabha answer on the 9th March 2018 which states that ‘loans extended as on 04.03.2018 since inception of the scheme is 54,947’.

Claim: Under Stand up India mission, 54,733 loans were sanctioned by the banks to SC, ST and women borrowers (up to February 2018).
Fact: Up to the 9th March 2018, the loans extended under the Stand-up India scheme are 54,947. The numbers are higher than the ones in the claim because of the dynamic nature of data collection. Hence, the claim is TRUE.

How much money was sanctioned to SC entrepreneurs?

The fourth claim related to the previous one is that, ‘under the same scheme, 239.12 crores for SC entrepreneurs (up to May 2018)’.

According to an answer provided in Lok Sabha, a total of 9477 loans have been sanctioned for SC entrepreneurs, while 7263 loans have been disbursed as of December 2018. The annual report (2017-18) of the Department of Financial Services shows that Rs, 1344.7 crore rupees have been sanctioned to SCs under 7086 accounts, by January of 2018. It is not known as to what part of the sanctioned amount is disbursed.

Claim: Under the Stand-up India scheme, 239.12 crores for SC entrepreneurs (up to May 2018).
Fact: Up until January of 2018, Rs. 1,344.7 crore rupees have been sanctioned for SC entrepreneurs. It is not known as to what part of the sanctioned amount is disbursed. Hence, the claim remains UNVERIFIED.

Is a new venture capital fund for OBCs launched?

The final claim, also related to the previous two is that, ‘a new venture capital fund for OBCs is to be launched with an initial corpus of 200 crore rupees’.

A new venture capital fund for OBCs was announced in the 2018-19 budget, but no allocation was made. Budget allocations were made in the 2019-20 budget for such a fund, but there is no evidence of the fund being launched.

Claim: A new venture capital fund for OBCs is to be launched with an initial corpus of 200 crore rupees, under the Stand-up India scheme.
Fact: A new venture capital fund for OBCs was announced in the 2018-19 budget, but no allocation was made. Budget allocations were made in the 2019-20 budget for such a fund, but there is no evidence of the fund being launched.  Hence this claim remains UNVERIFIED.

This story is part of a larger series on the 4-years of the Modi government. This series has been made possible with the flash grant of the International Fact Checking Network (IFCN). Read the rest of the stories in this series here

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