#MUDRA: PM launches MUDRA Bank to fund micro finance institutions
Delhi- April 8, 2015
The bank will have a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore
Prime minister Narendra Modi on Wednesday launched the Micro Units Development and Refinance Agency Ltd (MUDRA) in the capital.
With a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore, MUDRA 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.
MUDRA would also partner with state, regional level coordinators to
provide finance to last mile financiers of small, micro business
enterprises.For the time being the Bank would work as part of SIDBI, a principal
financial institution for the micro, small and medium enterprises.Modi while addressing at the launch said," People think that big
industries and corporate houses provide higher employment. The truth is
only 1 crore 25 lakh people are employed with big corporate houses. On
the other hand 12 crore people are employed with MSME sectors.We
need to understand the energy of the bottom of the pyramid of
individuals and provide them with means for upliftment. We would like to
study and adopt best practices on micro financing."
He said he believed that in one year the established banking system would also adopt the model of MUDRA.Addressing the ongoing plight of the farmers in the country, the PM assured they would get all help required and also announced that farmers will be compensated if 33 per cent of their produce is lost.”Farmers are suffering due to nature. Have taken detailed report for ministers who went to speak to farmers suffering due to unseasonal rains as well as banks to help restructure their farming model,” he said.
Finance Minister, Arun Jaitley said the announcement of MUDRA was with the intent to help 5.77 crore MSME entrepreneurs and industries. " Close to 20 per cent of the population depends on this sector. MUDRA will help in providing resources to this large section of the society."Jayant sinha, Minister of state, finance also present at the event believed that MUDRA will help revolutionize MSME sector just as NABARD did for the agricultural sector. The approach of MUDRA is not limited to credit only, but offers a credit – plus solution for these enterprises spread across the country.
The roles envisaged for MUDRA would include:
* Laying down policy guidelines for micro enterprise financing business,
Registration of MFI entities,
* Accreditation, rating of MFI entities
* Laying down responsible financing practices to ward off over indebtedness and ensure proper client protection principles and methods of recovery
*Development of standardised set of covenants governing last mile lending to micro enterprises
*Promoting right technology solutions for the last mile
*Formulating and running a Credit Guarantee scheme for providing guarantees to the loans,portfolios which are being extended to micro enterprises
*Support development & promotional activities in the sector
*Creating a good architecture of last mile credit delivery to micro businesses
*These measures to be taken up by MUDRA are targeted towards mainstreaming young, educated or skilled workers and entrepreneurs including women entrepreneurs.
Delhi:PM Modi launches MUDRA (Micro Units Development and Refinance Agency Ltd.) Bank pic.twitter.com/qYZmlLaoOI
— ANI (@ANI_news) April 8, 2015
Delhi: FM Arun Jaitley speaking at the launch of MUDRA (Micro Units Development and Refinance Agency Ltd.) Bank pic.twitter.com/NhKI5SH67n
— ANI (@ANI_news) April 8, 2015
He said he believed that in one year the established banking system would also adopt the model of MUDRA.Addressing the ongoing plight of the farmers in the country, the PM assured they would get all help required and also announced that farmers will be compensated if 33 per cent of their produce is lost.”Farmers are suffering due to nature. Have taken detailed report for ministers who went to speak to farmers suffering due to unseasonal rains as well as banks to help restructure their farming model,” he said.
Finance Minister, Arun Jaitley said the announcement of MUDRA was with the intent to help 5.77 crore MSME entrepreneurs and industries. " Close to 20 per cent of the population depends on this sector. MUDRA will help in providing resources to this large section of the society."Jayant sinha, Minister of state, finance also present at the event believed that MUDRA will help revolutionize MSME sector just as NABARD did for the agricultural sector. The approach of MUDRA is not limited to credit only, but offers a credit – plus solution for these enterprises spread across the country.
The roles envisaged for MUDRA would include:
* Laying down policy guidelines for micro enterprise financing business,
Registration of MFI entities,
* Accreditation, rating of MFI entities
* Laying down responsible financing practices to ward off over indebtedness and ensure proper client protection principles and methods of recovery
*Development of standardised set of covenants governing last mile lending to micro enterprises
*Promoting right technology solutions for the last mile
*Formulating and running a Credit Guarantee scheme for providing guarantees to the loans,portfolios which are being extended to micro enterprises
*Support development & promotional activities in the sector
*Creating a good architecture of last mile credit delivery to micro businesses
*These measures to be taken up by MUDRA are targeted towards mainstreaming young, educated or skilled workers and entrepreneurs including women entrepreneurs.
Shishu: Covering loans upto Rs 50,000
Kishor: Covering loans above Rs 50,000/- and upto Rs 5 lakh
Tarun: Covering loans above Rs 5 lakh and upto Rs. 10 lakh
The primary product of MUDRA will be refinance for lending to micro businesses, units. The initial products and schemes under this umbrella have already been created and the interventions have been named as above.
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