In response to the article published in Finance Matters last week, titled “MUDRA loan numbers – Biggest jumla by the Finance Minister” by Mr. Thomas Franco, Ministry of Finance & Corporate Affairs through their Addl. Director General (M&C), Press Relations & Information Division wrote to us saying that it is “factually incorrect and grossly misinterprets official data”. Mr. Franco, in his response, said “I stand by the veracity of the article.”
We are sharing the letter and the response verbatim.
~ CFA
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To, The Editor Centre for Financial Accountability New Delhi email: info@cenfa.org
This is in reference to the article on your online portal with headline “MUDRA loan numbers – Biggest jumla by the Finance Minister” written by Mr. Thomas Franco under > Home > Random Reflections > MUDRA loan numbers – Biggest jumla by the Finance Minister.
The story hosted on your portal is factually incorrect and grossly misinterprets official data. It is completely against ethics of journalism to misinterpret facts and misrepresent them in a way that misleads the reader.
The complete pertaining to MUDRA loans is attached. Also, the correct perspective is as follows:
“More than 49 crore are not the unique MUDRA borrowers, it is total number of loans extended to borrowers. It means that the borrowers have availed loan multiple times i.e. after paying the existing loans, they have availed fresh loan from different Member Lending Institutions (MLIs) namely, Banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs) and other financial intermediaries.”
It is brought to your notice that the contents of the said article are factually incorrect, illogical, misconstrued, and misleading, and you are requested to prominently publish the response of the Ministry of Finance to the article in your online portal; ideally on the same online landing page or as a link to the page.
It is further requested that the official response may be published in full, similar to the prominence of the original story.
Please also find attached with this email other data/details related to the scheme: Pradhan Mantri Mudra Yojana Data
Thanks and regards,
Nanu Bhasin
Addl. Director General (M&C)
Press Relations & Information Division
Ministry of Finance & Corporate Affairs
Room No.77B, North Block
Tel. 23092200 (NB Office)
Response from Thomas Franco:
I stand by the veracity of the article whose main purpose was to challenge the misleading contention that the apparently large number of 49.55 crore Mudra accounts points to its success.
I thank the DFS for clarifying that this apparently large number of 49 crore accounts does not imply that there are that many “unique MUDRA borrowers”. However, this important caveat is missing in all official citations of Mudra statistics to acclaim the success of the scheme. It thus gives the exaggerated impression that a large number of citizens have benefited from the widened access to credit, resulting from the Mudra scheme.
Curiously, while the DFS carefully avoids mentioning the actual number of “unique” borrowers under the Mudra scheme, this data is indeed available. This is important because it would reveal the actual number of beneficiaries, which would be a true metric of the scheme’s effectiveness. The official data reveals that there have been 1.8 crore “unique” borrowers between 2015 and March-end 2024. This is less than 4 per cent of the number of beneficiaries that is suggestively made by those repeatedly citing the 49.5 crore accounts figure; or, to put it differently, the actual number of beneficiaries is one-twenty-seventh of the claim made by official functionaries.
Even this lower number is misleading because 84 per cent of the beneficiaries are borrowers with a ticket size of only up to Rs. 50,000 (Sishu loans under the Mudra scheme). Given that one such loan is not enough to even to purchase a pushcart for vending, it is not surprising that the same borrower has to avail multiple loans to attempt a viable business on any meaningful scale.
~ Thomas Franco.
Thomas Franco is the former General Secretary of the All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.
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