Prime Minister Narendra Modi is set to launch the Rs 20,000-crore Micro Units Development and Refinance Agency (Mudra) Bank in a mega function on April 8, much like the launch of Pradhan Mantri Jan Dhan Yojana (PMJDY). The bank would provide institutional finance to micro entrepreneurs, while acting as a regulator for the microfinance institutions.
The setting up of the bank was proposed by finance minister Arun Jaitley in the Union Budget this year.
Sources said that the idea to launch the bank in a mega way is to create awareness among the end consumers. While the contours of the bank would be decided in the next two weeks, targets are likely to be set much like the PMJDY.
“Mudra will help in providing loans even to those who do not qualify as micro, small and medium enterprises…a loan of Rs 5 lakh or Rs 10 lakh required to set up a small business would be made available,” a senior government official who did not wish to be identified told HT.
According to official data, there are about 57.7 million small business units, mostly individual proprietorship, which run small manufacturing, trading or services businesses. Of this, 62% are owned by scheduled castes and tribes and other backward castes.
“This bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access formal systems of credit. Towards this direction, a major initiative has been announced in the recent budget in the name Mudra Bank,” a government statement said on Wednesday.
The initial corpus which has been earmarked for the bank is Rs 20,000 crore.
“I propose to create 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,” Jaitley said while presenting the Union Budget 2015-16.