Niti Aayog calls for guidelines, e-KYC to check PMMY applicants background

The government think tank NITI Aayog has pitched for a set of guidelines for assessing the creditworthiness and background verification for those availing loans under the Pradhan Mantri Mudra Yojana (PMMY). The Aayog in a report titled 'Impact Assessment of PMMY' suggested encouraging E-KYC authentication for loan underwriting. This will enhance the effectiveness of assessment checks. "A set of guidelines for assessing the creditworthiness and background verification must be enlisted to provide a security net to the banks, considering the loans are collateral free and a proper risk check and assessment has a critical role to play in the sustainability of results and success of the scheme," it said in the report posted on its website. The majority of borrowers under PMMY are small entrepreneurs who have very limited documents and this makes it difficult for the banks to run verification checks as it requires more staffing and employees. The Aayog also suggested that a proper reward