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MUDRA- Micro Units Development and Refinance Agency Banks


The Micro Units Development and Refinance Agency Banks also known as MUDRA Banks is one of the latest yojna launched by the Prime Minister of India, Narendra Modi.

The scheme was launched on April 8,this year, aims development of the small scale entrepreneurs, and to reach those areas which are still out of the reach of normal banks. Even more, there are many areas in the country where the people cannot access the loan and credit card facilities.

The committee was suggested during the annual budget of India, but was founded officially in the month of April.

Its objective is to focus around 5 crore users who are unable to receive the financial aid for expanding their business, and the scheme will finance the users using the last mile agents.

Benefits of Mudra Bank:

The main focus of the government is to boost up the small scale micro business, which will help in empowering the economy of the country.

The main reason for commencing this scheme is that the current remote entrepreneurs are unable to receive money from the institution and hence are forced to take loan from the money lenders at a high rate of interest. Which, as a result, affects the growth of the micro business.

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Objectives of the Mudra Bank:

The main objective of the committee is to build up the business by providing finance.

It also aims to setup a method of using the last credit mile agent scheme system for small and micro business.

Setting up a credit guarantee system so that money is not given on a loan to the person who otherwise will go into debts, and later becoming a liability for the government.

The committee will also guide the individual to prevent any kind of failure to his business.

Registering all the Microfinance Institutions and Agencies to evaluate the performance ratings and later will be accredited for the first time.

Various schemes offered by Mudra Bank:

The scheme currently offers three types of loan divided into three segments known as the starters, the mid stage finance and the next level growth seekers.

The three different kinds of loan provided are:

1 Shishu: This scheme is for the starters and will provide an amount of Rs 50,000.

2 Kishor: This scheme is for the middle level organizations providing a loan amounting from Rs 50,000- 5Lakh.

3 Tarun: This scheme id for the next level organizations which will help them to grow. It will provide loan from Rs 5 Lakh to Rs 10 Lakh.

The scheme will also empower the small scale business which will help the Indian economy to grow along with these entrepreneurs.

The MUDRA scheme in its initial stage, has been designed to meet requirements of different sectors, business activities and also for the entrepreneur segments.

 Sector – activity specific schemes

Micro Credit Scheme (MCS)

Refinance Scheme for Regional Rural Banks (RRBs) / Scheduled Co-operative Banks

Mahila Uddyami Scheme

Business Loan for Traders & Shopkeepers

Missing Middle Credit Scheme

Equipment Finance for Micro Units

Lot of work is being done on the salient features of the schemes and innovative products, which will be offered by MUDRA Loan to move forward.

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