Prime Minister Narendra Modi, while addressing a Rozgar Mela via videoconferencing today (13 April), said that those ridiculing the Pradhan Mantri MUDRA Yojana (PMMY) do not have an understanding of the common man's financial needs.
Further, he said that the scheme had created 8 crore new entrepreneurs and the ones ridiculing the scheme are those who "consider themselves big economists" and gave "loans on phone" to big businessmen.
While he did not name anyone, the remarks were apparently made in reaction to tweets put out by former Finance Minister P Chidamabaram, in which he asked what businesses could be started with an amount of Rs 50000.
Chidambaram also said that 83 per cent of the loans were for amounts under Rs 50000.
Reacting to the remarks, Bharatiya Janata Party (BJP) state president, K Annamalai said that Chidambaram was quoting wrong data as the Shishu loans, i.e., under Rs 50000 were actually 41 per cent of the loans disbursed under the scheme.
A couple of days later, Professor Shamika Ravi who is a member of the Economic Advisory Council to the Prime Minister and has been teaching microfinance for 19 years said that she was shocked to see such remarks made by a former Finance minister.
Further, she said that the average loan size in microfinance is less than Rs 50000 and the total loan portfolio for such loans in the country is now Rs 3 lakh crore.
She added that micro loans had started with the idea of providing micro-credit to micro-enterprises.
The PMMY was launched on 8 April 2015 by Prime Minister Narendra Modi with the aim to facilitate easy collateral-free micro credit of up to Rs 10 lakh to non-corporate, non-farm, small and micro entrepreneurs for income generating activities.
The loans under PMMY are provided by member lending institutions (MLIs), including banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.
Loans amounting to Rs 23.2 lakh crore have been disbursed since the launch of the scheme.
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