Pradhan Mantri MUDRA Yojana PMMY

Pradhan Mantri MUDRA Yojana PMMY

MUDRA will be the key to success for small entrepreneurs. Pradhan Mantri MUDRA Yojana (Micro Units Development and Refinance Agency) will provide support to the small entrepreneurs of India who are the biggest cogs in the wheels of business and help the economy grow – it is one of PM Narendra Modi and his party, the Bharatiya Janata Party’s (BJP), major pet policies. Govt has expressed confidence that within a year’s time, the major banks would adopt the MUDRA model. The MUDRA scheme is aimed at “funding the unfunded” and save them (small entrepreneurs) from exploitation at the hands of money lenders.

1. There are a number of facilities provided for the large industries in India, but according to the government there is a need to focus on the 5.75 crore self-employed people who use funds of Rs 11 lakh crore, with an average per unit debt of Rs 17,000 to employ 12 crore Indians. These facts, actually led to the vision for MUDRA Bank.

2. In his Budget Speech for Financial Year (FY) 2015-16, the Union Finance Minister Arun Jaitley had proposed the creation of a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore.

3. MUDRA, to be set up through a statutory enactment, would be responsible for developing and refinancing through a Pradhan Mantri MUDRA Yojana, all Micro-finance Institutions (MFIs) which are in the business of lending to micro/small business entities engaged in manufacturing, trading and service activities.


4. MUDRA would also partner with State/Regional level coordinators to provide finance to Last Mile Financiers of small/micro business enterprises.


5. Further, the approach goes beyond credit only approach and offers a credit – plus solution for these enterprises spread across the country.

6. MUDRA will lay down policy guidelines for micro enterprise financing business.

7. MUDRA will register MFI entities

8. MUDRA will provide accreditation /rating of MFI entities

9. MUDRA will lay down responsible financing practices to ward off over indebtedness and ensure proper client protection principles and methods of recovery

10. MUDRA will formulate and run  a Credit Guarantee scheme for providing guarantees to the loans/portfolios which are being extended to micro enterprises

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