Mudra Bank launched to help small business

It will act as regulator and decide on policies for micro enterprise financing

GN Bureau | April 8, 2015


#Mudra   #bank   #micro business   #finance minister   #Arun Jaitley  

Prime minister Narendra Modi on Wednesday launched Mudra Bank, which will provide credit of up to Rs 10 lakh to small entrepreneurs and act as a regulator for 'micro-finance institutions' (MFIs).

The Micro Units Development Refinance Agency  or the Mudra Bank comes under  Pradhan Mantri Jan Dhan Yojana  and it will frame policy guidelines for micro enterprise financing business and registration of MFI entities as well as their accreditation and rating. It will also lay down "responsible financing practices" to ward off over indebtedness and ensure proper client protection principles and methods of recovery, besides development of standardised set of covenants governing last mile lending to micro enterprises.

There are about 5.77 crore small business units. These units find it difficult to access credit from the regular banking system.  This is where Mudra comes in.

The Bank will nurture small businesses through different stages of growth and development of businesses termed as Shishu, Kishor and Tarun.

Shishu: This is the first step when the business is just starting up. The loan cover in this stage will be up to Rs 50,000.  Kishor: In this stage business, the entreprenuer will be eligible for a loan ranging from Rs 50,000 to Rs 5 lakh.  Tarun: This last stage of growth envisages loans for upto Rs 10 lakh.

In his budget speech, finance minister Arun Jaitley had proposed the Mudra Bank with a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore.

"Providing access to institutional finance to such micro/small business units/enterprises will not only help in improving the quality of life of these entrepreneurs but also turn them into strong instruments of GDP growth and employment generation," the finance ministry said in a statement.

Comments

 

Other News

When police data becomes the algorithm

For decades, policing has followed a familiar sequence: a crime occurs, the police respond, an investigation produces records and those records become part of the institutional memory of the criminal justice system. Artificial intelligence is beginning to alter that sequence. Instead of merely recording

Before India voted, the framers worried about the referee

“We are making a Constitution forever and not only for today.” Shibban Lal Saksena said this in the Constituent Assembly on June 15, 1949. He was warning that a ruling party might one day choose a loyalist to run India’s elections. Seventy-seven years later, the Supreme Court is wrestli

Delhi moves to real-time traffic management

The Cabinet Committee on Economic Affairs (CCEA), chaired by prime minister Narendra Modi, has approved implementation of the ITMS Project by Delhi Police at an estimated cost of Rs.1,789.52 crore, inclusive of taxes. The project will cover 42 identified traffic corridors and will be implemented in three

MDR on UPI: Can sustainability come without weakening the network?

The extraordinary transaction volumes and value (₹29.82 Lakh crore in August 2026 alone) of the Unified Payments Interface (UPI) have made it not only an Indian success story, but a global one. In 2024, UPI accounted for nearly 49% of the world’s real-time payment transaction volume, with more th

The Xi-Trump summit: The unending rivalry

Diplomacy is akin to an art, wherein the summitry, conflict resolution and negotiations form apt constituents of the entire context of deal making and “playing for keeps” in the international arena. The Xi-Trump summit in Washington last week, in which the American president broke all conside

“Indians, yet treated like outsiders”

Moving to Delhi-NCR for education can be an exciting experience for students from Northeast India. It gives us a chance to meet new people, experience a different culture and become more independent. But living away from home also comes with challenges that people who have not experienced them may not al

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter