Prime 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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