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In this article, we would discuss about the Micro Units Development Refinance Agency (MUDRA).

On September 25, Finance Minister Arun Jaitley announced
that the government aims to disburse Rs.1.22 lakh crore to small businesses through banks by the end of FY15-16 under the Pradhan
Mantri MUDRA (Micro Units Development Refinance Agency) Yojana.  The goal is to facilitate faster growth of
businesses in the non-corporate small business sector (NCSBS) by ensuring what
they mainly lack- financial aid. The government plans to reach out to 1.25 to 1.75 crore micro and marginal businesses.

What do small businesses
stand to gain?

The FM stated that till date Rs.24,000 crore has been
disbursed to around 37 lakh small entrepreneurs under PMMY. The new loan
target would help these businesses expand and also create jobs for people.

The scheme covers scores of small businesses like service
sector units, fruit/vegetable vendors, food processing units, artisans, repair
shops, trucks and machine operators, small industries, etc. 

One of the main highlights is that beneficiaries will be
exempted from supplying loan guarantee (collateral).

Though these people enjoy relaxed loan norms, the FM has assured
that money will not be lent based favouritism and that banks would vet the
credibility of the businesses.

“This money will not be a fair (mela) to give
away money of state and private banks. It will be linked to business and
related projects. Beginning a campaign today (September 25) till October 2, we
will take this loan programme forward to make it more popular,” said Jaitley.

All about MUDRA  

–
Under the Pradhan Mantri Mudra Yojana (PMMY)
that was launched in April 2015, loans upto Rs.10 lakh are provided to non-farm
sector income generating activities. This will be extended by all public sector
banks, regional rural banks and cooperative banks, private and foreign banks,
Micro Finance Institutions (MFIs) and Non-Banking Finance Companies (NBFCs).

–
Launched under the PMMY, MUDRA has been set up
for development of small businesses and carry out refinancing activities for the
same. The financial services will be discharged through MUDRA Bank.

– The main goal of the institution is to provide formal sources of funds to the NCSBS to drive holistic growth of entrepreneurship.

– It is not a direct lending institution. It would provide refinance support to state and regional-level intermediaries, namely NBFCs / MFIs, banks, primary lending institutions, etc. These institutions will, in turn, deliver the funds to beneficiaries.

–
Initially, it would operate as a subsidiary of the
Small Industries Development Bank of India (SIDBI).

–
MUDRA offers loans under 3 categories, viz. Shishu
(up to Rs.50,000), Kishore (Rs.50,000-Rs 5 lakh) and Tarun (Rs.5-10 lakh).

–
MUDRA has special schemes for women
entrepreneurs called the Mahila Uddyami Scheme wherein financial assistance
will be provided under all three loan categories.

–
People can use the MUDRA Card, a RuPay Debit
Card, which can be used to withdraw cash from ATM or business correspondent. Using
the card, one can also repay the amount when surplus is available in order to
reduce interest burden.

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