AHMEDABAD: As micro-enterprises battle the aftershocks of the Covid-19 pandemic, gross non-performing assets (NPAs) or bad loans outstanding under the Pradhan Mantri Mudra Yojana increased 48% in Gujarat.
According to the latest report by the state-level bankers’ committee (SLBC), Gujarat, NPAs for Mudra loans stood at Rs 872.25 crore in absolute terms in the September quarter of 2021-22. NPAs went up from Rs 587.26 crore in the corresponding quarter of 2020-21, the report states.
During the September quarter of this year, the total outstanding of loans extended under Pradhan Mantri Mudra Yojana (PMMY) stood at Rs 9,300.5 crore.
From April to November 2021, loans worth Rs 5,172.56 crore were extended under PMMY in Gujarat of which, Rs 3,083.34 crore was disbursed between August and November.
According to bankers, non-performing assets went up in Mudra loans as micro enterprises continued to battle aftershocks of Covid-19.
“Due to the Covid-19 pandemic, smaller enterprises and a number of players in the informal sector faced a lot of disruption. Consequently, their loan repayment capacities weakened and more NPAs were classified.
“The situation, however, improved slightly in the September quarter this year, as businesses across the spectrum began to head towards normal,” said a well-placed source in the SLBC.
Besides micro enterprises, a lot of small traders and vendors are also eligible for Mudra loans, and they were among the worst affected entities due to the Covid-19 lockdown, said industry sources.
“The increasing prices of raw materials and growing uncertainty affected businesses across sectors and sizes.
“The impact will be steeper on smaller enterprises because they don’t have deep pockets. At the same time, being classified as an NPA makes things more difficult for small enterprises because it makes getting finance from other banks difficult as well,” said Pathik Patwari, senior vice president, Gujarat Chamber of Commerce and Industry (GCCI).
