PM launches Pradhan Mantri MUDRA Yojana

Date: April 08, 2015

MUDRA Bank Credit Guarantee Micro buisinesses Entrepreneurs.

PM launches Pradhan Mantri MUDRA Yojana

PM launches MUDRA Bank to fund small businesses

Prime Minister has launched the Micro Units Development and Refinance Agency Ltd (MUDRA) with a corpus of Rs 20,000 crore. It has a credit guarantee corpus of Rs 3,000 crore. The MUDRA bank  will be responsible for developing and refinancing, through the Pradhan Mantri MUDRA Yojana, all microfinance Institutions (MFIs) in  manufacturing, trading and service activities.

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Role and function of MUDRA :

  • Laying down policy guidelines for micro enterprise financing business, registration of MFI entities
  • Accreditation, rating of MFI entities
  • Laying down responsible financing practices to ward off over-indebtedness and ensure proper client protection principles and methods of recovery
  • Development of standardised set of covenants governing last-mile lending to micro enterprises
  • Promoting right technology solutions for the last mile
  • Formulating and running a credit guarantee scheme for providing guarantees to loans and portfolios being extended to micro enterprises
  • Support development and promotional activities in the sector
  • Creating a good architecture for last-mile credit delivery to micro businesses
  • The measures to be taken up by MUDRA are targeted towards mainstreaming young, educated or skilled workers and entrepreneurs, including women entrepreneurs.

The primary product of MUDRA will be refinance for lending to micro businesses and units. The initial products and schemes under this umbrella have already been created and the interventions have been named:

                      Shishu: Covering loans upto Rs 50,000

                      Kishor: Covering loans above Rs 50,000/- and upto Rs 5 lakh

                      Tarun: Covering loans above Rs 5 lakh and upto Rs. 10 lakh