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PM Modi launches Mudra bank under Pradhan Mantri Jan Dhan Yojana

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pradhan-mantri-jan-dhan-yojna-logoPrime Minister Narendra Modi launched Micro Units Development and Refinance Agency (Mudra Bank) under the Pradhan Mantri Jan Dhan Yojana.

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.

Mudra would also partner with State/Regional level coordinators to provide finance to Last Mile Financiers of small/micro business enterprises. Further, the approach goes beyond credit only approach and offers a credit – plus solution for these enterprises spread across the country.

The roles envisaged for Mudra 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 under the scheme of Pradhan Mantri MUDRA Yojana
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