PM Narendra Modi launches MUDRA Bank to provide credit to small entrepreneurs
Prime Minister Narendra Modi on 8 April 2015 launched Micro Units Development Re-finance Agency (MUDRA) Bank in New Delhi.
MUDRA Bank will act as a regulator for ‘Micro-Finance Institutions’ (MFIs) involved in manufacturing, trading and service activities to promote their growth.
The Pradhan Mantri MUDRA Yojana will be the main support system for the bank and will be the part of Small Industries Development Bank of India (SIDBI).
The MUDRA bank was proposed in Budget 2015-16 by Union Government with an initial corpus of 20,000 crore rupees. Apart from this, 3,000 crore rupees also has been earmarked as credit guarantee corpus.
The envisaged roles for MUDRA Bank include
- Formulate policy guidelines for micro-enterprise financing business and registration of MFI entities.
- Undertake rating and accreditation of MFI entities.
- Develope standardized set of guidelines in order to govern last-mile lending to micro enterprises.
- Promote appropriate technology solutions for the last mile.
- Formulate and operate a credit guarantee schemes in order to provide guarantees to loans and portfolios that are extended to micro enterprises.
- Support promotional and development activities in the sector and create a good architecture for last-mile credit delivery.
MUDRA Bank will provide financing on 3 stages- Shishu, Kishore and Tarun.
- Shishu is first stage in which loan cover upto Rs 50,000 will be given to a business entity at start of business.
- Kishore is second stage in which loan cover ranging from Rs 50,000 to Rs 5 lakh will be given.
- Tarun is the third stage in which loan cover up to Rs. 10 lakh will be given.
Categories: Business, Economy & Banking