MUDRA benefits yet to reach last mile borrower: CAIT
Expressing concerns over loan disbursal under MUDRA scheme, traders body CAIT on Sunday said the benefits are yet to reach the last mile borrower. "It appears that out of more than Rs 1 lakh crore so far disbursed under MUDRA, the major financing has been done to existing borrowers and it is yet to reach the last mile borrower who is deprived of funds and for whom actually MUDRA was launched," CAIT said in a statement.
The Confederation of All India Traders (CAIT) said it has drawn attention of Finance Minister Arun Jaitley towards Parliamentary Standing Committee report on MSME Ministry suggesting more inclusive role of micro-finance institutions and non-banking finance companies. There are about 5.77 crore small businesses in the country and out of which only 4 per cent could able to obtain loans from formal institutions and rest 96 per cent were dependent upon money lenders and private sources for getting financial assistance, CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said. "However, so far the last mile borrower has not been able to get requisite finance from the banks who have done major refinancing so far under MUDRA," they said in the statement.
CAIT also cited report of the Parliamentary panel that in first tranche of Rs 5,000 crore made available to MUDRA, only Rs 2,184 crore were sanctioned, out of which only Rs 1,364 crore were disbursed. Besides, CAIT said despite MUDRA tipped to be separate regulator out of RBI's ambit by way of a legislation to be passed in Parliament, nothing more than been done expect one draft for the proposed legislation.
"The committee formed to draft MUDRA legislation has so far held only one meeting in past about one year." CAIT said the scheme could be a game changer for the economy but it appears that invisible forces have again come on its way.
"The CAIT will sought an audience with both Prime Minister and Finance Minister to apprise them with the ground realities in respect of MUDRA and will urge them to take necessary steps to convert the vision of Prime Minister into reality," the statement added.