Public sector banks have organized a mega campaign from September 25 to October 2 to give a push to the Pradhan Mantri MUDRA Yojana. The scheme was launched in April and as of September 22, a total of 35.60 lakh borrowers have availed credit totaling Rs.24,123 crore. All PSBs, Regional Rural Banks and Private sector banks have a small business loan disbursal target of Rs 1.22 lakh crore this year, and I hope the benefits of the scheme will reach more and more cash starved micro and small businesses and struggling entrepreneurs with the ongoing efforts.

Ever since its launch, the MUDRA scheme has been touted as a potential game changer. The objective is to fund and promote microfinance institutions, which would in turn provide loans to micro and small businesses. It is expected that 5.77 crore small business units in the country will benefit from this scheme, which in turn will bring a sea change into the economy and the business ecosystem in the country. All this sounds great, but I think there is an urgent need for publicity of the scheme. Otherwise, the scheme, like many other MSME schemes, could be lost in lack of awareness and half-hearted implementation.

Recently, I have had talks with some small entrepreneurs and I found that most of them have heard about the MUDRA scheme but they don't really know how and whom to approach for it. Some media reports view that even many bankers are clueless about details of this ambitious scheme. The government has set up a dedicated website www.mudra.org.in, which gives details about who can take loan, what are the loan categories, how to apply, etc. but I think it is imperative to launch a massive awareness drive, involving the state governments, to make such a comprehensive scheme successful.

Meanwhile, the RBI today cut repo rate by 50 basis points. This monetary easing will provide a much-needed relief to the economy and I hope the commercial banks will transfer the benefits to end users in the form of cheaper personal and commercial loans. In addition, I still feel the need for a constant special focus on MSME lending. Availability of credit, lower interest rates, faster disposal of loan applications, collateral free loans, strict implementation of existing schemes — the Centre should address all these issues with utmost urgency.

I invite your opinions.