MUDRA Bank (Micro Units Development and Refinance Agency Bank), is a new institution set up by the Government of India for development of micro units and refinance of Micro Finance Institutions (MFIs) to encourage entrepreneurship in India and provide the funding to the non corporate small business sector. Finance Minister Shri Arun Jaitley, while presenting the Budget for FY 2015-16 had announced the formation of MUDRA Bank. Accordingly, MUDRA was registered as a Company in March 2015 under the Companies Act 2013 and as a Non Banking Finance Institution with the Reserve Bank of India on 07 April, 2015. MUDRA has been initially formed as a wholly owned subsidiary of Small Industries Development bank of India (SIDBI) with 100% capital being contributed by it. Presently, the authorised capital of MUDRA is Rs. 1000 crore and paid up capital is Rs. 750 crore, fully subscribed by SIDBI.
MUDRA Yojana was launched by the Prime Minister Shri Narendra Modi on 08 April, 2015 at a function held at Vigyan Bhawan, New Delhi. MUDRA is aimed at “funding the unfunded”, with focus on small enterprises-the back bone of our economy. According to the Prime Minister, “the biggest capital of the poor is their integrity and combination of integrity with MUDRA, the Capital, will be the key to success for small entrepreneurs, i.e., “पूंजी सफलता की कुंजी”.
Under Pradhan Mantri MUDRA Yojana, Loans would be provided under three categories :
1. Shishu:- Loans up to Rs. 50,000; 2. Kishore:- Loans above Rs. 50,000 up to Rs. 5 lakh and
3. Tarun:- Loans above Rs. 5 lakh and below Rs. 10 lakh. These three categories will signify growth, development and funding needs of the beneficiaries.
Micro enterprises or the Non-Corporate Small Business Sector is the economic foundation of India and constitute a major economic segment in our country that provides large employment after agriculture. This sector with 5.75 crore self-employed persons employ 12 crore people in the country, whereas, only 1.25 crore people find employment in large industries. The segment includes micro units engaged in manufacturing, processing, trading and services sector. The sector comprises myriad of small manufacturing units, shopkeepers, fruits / vegetable vendors, truck & taxi operators, food-service units, repair shops, machine operators, small industries, artisans, food processors, street vendors and many others.
Formal or institutional architecture has not been able to reach out to meet the financial requirements of this sector. They are largely self financed or rely on personal networks or are used to exploitation at the hands of moneylenders so far. MUDRA by providing finance will instill a new confidence in them, that the country is ready to support them in their efforts that are contributing so heavily to the task of nation building and supporting the small entrepreneurs of India is the biggest way to help the Indian economy grow and prosper. Mainstreaming these enterprises will not only help in improving the quality of life of these entrepreneurs but will also contribute substantially to job creation in the economy thereby achieving higher GDP growth.
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