New Delhi, Aug. 20 -- The non-performing asset (NPA) ratio against outstanding loans under the Pradhan Mantri Mudra Yojana (PMMY) for Scheduled Commercial Banks has climbed to 9.81 percent as of March 2025, compared with 5.47 percent in March 2018, Finance Minister Nirmala Sitharaman informed the Rajya Sabha on Tuesday.

By contrast, the NPA rate calculated against the total disbursed loan amount under the scheme stood at 2.19 percent in March 2025, slightly lower than 2.71 percent at the end of March 2018.

Sitharaman noted that the PMMY primarily targets borrowers outside the formal credit system-often first-time entrepreneurs without collateral or significant business experience.

As a result, defaults under the scheme are structurally...