Do you About MUDRA Yojana?
MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., is a financial institution set up by Government of India for development and refinancing of micro units enterprises. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016. The purpose of MUDRA is to provide funding to the non-corporate small business sector through various Last Mile Financial Institutions like Banks, NBFCs and MFIs.
Why Mudra has been setup?
The biggest bottleneck to the growth of entrepreneurship in the Non–Corporate Small Business Sector (NCSBS) is lack of financial support to this sector. More than 90% of this sector does not have access to formal sources of finance.
GoI is setting up MUDRA Bank through a statutory enactment for catering to the needs of the NCSBS segment or the informal sector for bringing them in the mainstream.
WHAT ARE THE OFFERINGS OF MUDRA? HOW WILL MUDRA FUNCTION?
Under the aegis of Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has already created its initial products / schemes.
The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also to provide a reference point for the next phase of graduation / growth to look forward to.
The financial limit for these schemes are:-
- a. Shishu : covering loans upto 50,000/-
- b. Kishor : covering loans above 50,000/- and upto 5 lakh
- c. Tarun : covering loans above 5 lakh to 10 lakh
MUDRA’s delivery channel is conceived to be through the route of refinance primarily to Banks/NBFCs/MFIs.
At the same time, there is a need to develop and expand the delivery channel at the ground level. In this context, there is already in existence, a large number of ‘Last Mile Financiers’ in the form of companies, trusts, societies, associations and other networks which are providing informal finance to small businesses.
WHAT KIND OF BORROWERS ARE ELIGIBLE FOR ASSISTANCE FROM MUDRA?
small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.
What is MUDRA Card?
MUDRA Card is an innovative credit product wherein the borrower can avail of credit in a hassle free and flexible manner. It will provide a facility of working capital arrangement in the form of CC/OD to the borrower. Since MUDRA Card will be RuPay debit card, it can be used for drawing cash from ATM or Business Correspondent or make purchase using Point of Sale (POS) machine. Facility is also there to repay the amount, as and when, surplus cash is available, thereby reducing the interest cost.
Roles and Responsibilities of MUDRA
MUDRA has been formed with primary objective of developing the micro enterprise sector in the country by extending various support including financial support in the form of refinance, so as to achieve the goal of “funding the unfundedâ€. The GOI Press release of 2 March 2015 has laid down the roles and responsibilities of MUDRA.
Subsequently GOI has also decided that MUDRA will provide refinance support, monitor the PMMY data by managing the web portal, facilitate offering guarantees for loans granted under PMMY and take up other activities assigned to it from time to time. Accordingly MUDRA has been carrying out these functions over the last one year.
Monitoring of PMMY
Pradhan Mantri Mudra Yojana (PMMY) was launched along with the launching of MUDRA on 08 April 2015 and the detailed guidelines were issued by Government of India to all banks and MFIs. MUDRA was given the responsibility of monitoring the programme by collecting the information on regular basis. Accordingly, MUDRA has put in place a monitoring portal which captures the data on lending under PMMY, in a granular fashion.