The Non Performing Asset (NPA) rate in the MUDRA Scheme is the lowest in the world for the segment. In an interview with an English Daily, Prime Minister Narendra Modi stated this, adding that just 3.5 percent loans provided under the scheme have turned into NPA, which is an exceptionally low default rate in this segment worldwide. Mr. Modi said that while during the previous UPA rule, the banks were burdened with toxic assets and favoured select elites of those who were close to power centres, the MUDRA has redirected resources to the grassroots, fostering entrepreneurship without compromising financial stability. The Prime Minister highlighted that the MUDRA is part of a larger vision to ensure that the entrepreneurial ability, innovation, creativity and self-reliance of the people at the grassroots is respected and supported. He added that through the MUDRA Yojana, the government wanted to give a message to every Indian: The Centre would stand as a guarantee in their journey to fulfil their aspirations.

Talking about the banking system, Prime Minister Modi said the banks in the country are in good health, and many of them have touched record profits due to relentless banking reforms and the deft handling of the NPA crisis by the government. He added that over the last decade, programmes including MUDRA, PM-Svanidhi and Standup India have benefited from the improving health of the banks. He also stated that due to these schemes, India’s banking system has become more responsive towards the needs of small entrepreneurs. Mr Modi expressed confidence that India’s banking sector will continue to be a strong partner in the journey of ensuring financial inclusion and supporting entrepreneurship at the grassroots.