Mudra Bank

What is Mudra Bank?

During the Budget session Finance Minister had announced to start a bank to the name of Mudra Bank to help small and medium enterprises via refinancing, The MUDRA comes from Micro Units Development andRefinance Agency (MUDRA Bank).

The new bank for entrepreneurs will have a corpus of Rs 20,000 cr. and will provide refinance and assistance to those financers who finance SMEs and Entrepreneurs in India.

This bank will act as regulator and refinancer to MFI (Micro Finance Intuitions) which will lend to SMEs to help them grow. As of now, Mudra Bank will only assist to those MFIs, and investors who are investing in the sectors such as manufacturing, trading and services niche.

Also, this bank will reach out to the “last mile financier of small/micro business enterprises” via various statutory enactments. And, it will help them manage their finances, increase investments and refinance SMEs loan for better action and more results.

The sector is very happy to welcome Mudra Bank.

Prime Minister of India Shri Narendra Modi will launch MUDRA (Micro Units Development and Refinance Agency) Bank on 8th April, 2015 at 9.15 AM at Vigyan Bhawan, New Delhi in the presence of Hon’ble Finance Minister Shri Arun Jaitley.

Finance Minister in his Budget Speech for 2015-16 announced formation of MUDRA Bank. Central government firmly believes that development has to generate inclusive growth. While large corporate and business entities have a role to play, this has to be complemented by informal sector enterprises which generate maximum employment. There are some 5.77 crore small business units, mostly individual proprietorship, which run small manufacturing, trading or service businesses. 62% of these are owned by SC/ST/OBC.

These bottom of the pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access formal systems of credit. I, therefore, propose to create a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of `20,000 crore, and credit guarantee corpus of `3,000 crore. MUDRA Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana.

In lending, priority will be given to SC/ST enterprises. These measures will greatly increase the confidence of young, educated or skilled workers who would now be able to aspire to become first generation entrepreneurs; existing small businesses, too, will be able to expand their activities. Just as we are banking the un-banked, we are also funding the un-funded.

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