Mudra Bank and Pradhan Mantri Mudra Yojana

Ministry/Department :  Ministry of Finance
MUDRA stands for Micro Units Development and Refinance Agency
The core objective of the bank is to fund the unfunded. It will finance to “Last Mile Financiers” of small/micro businesses. The lending priority will be given to SC/ST enterprises
  • MUDRA Bank will be set up as a statutory body
  • It will regulate and refinance all MFI who lend to MSME engaged in small manufacturing, trade or services.
  • It will partner all state/regional level coordinators to provide easy finance
to even the remote investors.
  • MUDRA Bank has rightly classified the borrowers into three segments:
    • the starters,
    • the mid-stage finance seekers and
    • the next level growth seekers.
  • To address the three segments, MUDRA Bank has launched three loan instruments:
    • Shishu: covers loans upto Rs 50,000/-
    • Kishor: covers loans above Rs 50,000/- and upto Rs. 5 lakh
    • Tarun: covers loans above Rs 5 lakh and upto Rs 10 lakh
  • It provides a loan at low rates to small entrepreneurs
  • The bank has been allotted a Refinance Fund of Rs. 20,000 Crores from the shortfalls of Priority Sector Lending.
Primary functions of MUDRA Bank are:
  • Frame policy guidelines for micro/small enterprise MFIs
  • Registration of MFIs
  • Regulation of MFIs
  • Promoting and regulating responsible finance in favour of client welfare, remove indebtedness and provide proper protection principles and recovery methods
  • Accreditation and rating of MFIs
  • Promoting right technology solutions for problems faced by MFIs and borrowers.
  • Framing a robust architecture for Last Mile Credit Delivery to MSMEs under the umbrella of Pradhan Mantri Mudra Yojana.
Factual Information:
  • Launched in 2015
  • Details reveals the reality that only 1 crore 25 lakh people find employment in large industries, whereas small enterprises employ 12 crore people in the country. So MSME are very imprtant
  • Mudra Bank is the vehicle to implement PM Mudra Yojana

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