Despite a discount on the interest rates women pay, loans sanctioned to them under a national programme meant to encourage “micro” businesses fell by 5.8 percentage points in 2016-17 since the scheme’s launch in 2015-16, according to government data, although three in four loans sanctioned over three years were to women.

Loans to women fell to 29 million or 73% of the 39.7 million total loans sanctioned under the Pradhan Mantri Mudra--acronym for Micro Units Development and Refinance Agency--Yojana (Prime Minister’s Mudra Scheme) in 2016-17 from 27.6 million or 79% of 35 million in 2015-16, according to a reply by finance minister Arun Jaitley to the Lok Sabha (lower house of Parliament) on January 5, 2018.

Encouraging women to start small businesses is one of the goals of the programme: The government gives a discount of 25 basis points (a basis point is a hundredth of a percent) on the interest charged on loans to women under the Women Enterprise Programme. A “micro” unit is one that has invested less than Rs 25 lakh in plant and machinery or Rs 10 lakh in equipment, according to a government definition.

Loans To Women Under Pradhan Mantri Mudra Yojana FY2016-17*
Loan accounts for women Total loan accounts % women in total Change in % points
2016-17 29,146,894 39,701,047 73.42 -5.79
2015-16 27,628,265 34,880,924 79.21

Source: Lok Sabha reply, Mudra portal accessed on February 5, 2018

The latest data are relevant because over 24 years to 2013, female labour force participation in India fell from 35% to 27%, IndiaSpend reported on August 5, 2017. Only Saudi Arabia was worse than India among G-20 countries, in South Asia, only Pakistan was.

Cumulatively since 2015-16, 75.5 million loans had been sanctioned to women as of December 22, 2017, Jaitley said. In the first two years, of the 74.6 million loans sanctioned under Mudra, 56.77 million or 76% were to women.

As of January 26, 2018, 106 million loans had been sanctioned under the scheme, according to data on the Mudra portal on February 5, 2018.

Per 1,000 women, Puducherry had sanctioned the highest number of loans at 368 between 2015-16 and 2017-18 (till December 22), followed by Odisha (319) and Karnataka (289), according to an IndiaSpend analysis.

The India average over the three years (till December 22, 2017) was 125 loans per 1,000 women.

Arunachal Pradesh was the worst at three loans per 1,000 women between 2015-16 and 2017-18 (till December 22), followed by Daman and Diu (7) and Jammu and Kashmir (8).

Of 36 states and union territories, 10 had sanctioned more than the national average of 125 and 14 more than 100 loans per 1,000 women between 2015-16 and 2017-18 (till December 22).

Mudra Loans Per 1,000 Women FY2016-18*
Rank Female Population 2011 Census 2015-16 2016-17 2017-18* Total FY2016-18* Per 1,000 females
India 604839730 27628265 29146894 18730738 75505897 124.84
1 Puducherry 635442 64932 102069 67044 234045 368.32
2 Odisha 20762082 2104820 2409957 2109631 6624408 319.06
3 Karnataka 30128640 3819070 2888347 2008316 8715733 289.28
4 Tamil Nadu 36009055 4148794 3738516 2157700 10045010 278.96
5 Tripura 1799541 45546 199746 149320 394612 219.28
6 West Bengal 44467088 2076842 3955741 2269023 8301606 186.69
7 Madhya Pradesh 35014503 2192664 2008028 1301385 5502077 157.14
8 Bihar 49821295 2047823 3029715 1871435 6948973 139.48
9 Maharashtra 54131277 2940363 2747979 1696779 7385121 136.43
10 Chhattisgarh 12712303 488968 672626 431159 1592753 125.29

*Note: 2017-18 figures till December 22; Source: Lok Sabha reply, Census 2011, Telangana Statistical Year Book 2017
For dataset of all states, Click here

(Vivek is an analyst with IndiaSpend.)

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