India is a nation where women empowerment is yet to take place, especially in the rural and semi urban areas, where they are still looked down as the weaker and incapable sex. When women are struggling for their basic rights, it is almost near to impossible to make any sort of progress or development as a nation in the global village that we live in today. The Mudra Yojana Scheme launched by the Government of India is trying its very best to improve the status of women by providing loans and encouraging them to start new ventures and thereby empowering them by providing a financial security of individual income. A specified sum of money is allotted to be funded to just the women entrepreneurs or the WomenPreneurs, a wise decision implemented by the Indian Government.
MUDRA, which stands for Micro Units Development & Refinance Agency Ltd, is a financial institution beingset up by Government of India for development and refinancing micro units enterprises. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016. The purpose of MUDRA is to provide funding to the non-corporate small business sector through various Last Mile Financial Institutions like Banks, NBFCs and MFIs.
The biggest bottleneck to the growth of entrepreneurship in the Non–Corporate Small Business Sector (NCSB) is lack of financial support to this sector. More than 90% of this sector does not have access to formal sources of finance. GoI is setting up MUDRA Bank through a statutory enactment for catering to the needs of the NCSB segment or the informal sector for bringing them in the mainstream. Pending enactment of an act for MUDRA Bank, a Non Banking Finance Company as MUDRA Ltd has been set up as a subsidiary of SIDBI.
MUDRA would be responsible for refinancing all Last Mile Financiers such as Non-Banking Finance Companies, Societies, Trusts, Section 8 Companies [formerly Section 25], Co-operative Societies, Small Banks, Scheduled Commercial Banks and Regional Rural Banks which are in the business of lending to micro/small business entities engaged in manufacturing, trading and services activities. MUDRA would also partner with State/Regional level financial intermediaries to provide finance to Last Mile Financier of small/micro business enterprises.
What are the offerings of MUDRA? How will MUDRA function?
Under the aegis of Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has already created its initial products / schemes. The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also to provide a reference point for the next phase of graduation / growth to look forward to. The financial limit for these schemes are :-
- Shishu : covering loans upto 50,000/-
- Kishor : covering loans above 50,000/- and upto 5 lakh
- Tarun : covering loans above 5 lakh to 10 lakh
MUDRA’s delivery channel is conceived to be through the route of refinance primarily to Banks/NBFCs/MFIs.
At the same time, there is a need to develop and expand the delivery channel at the ground level. In this context, there is already in existence, a large number of ‘Last Mile Financiers’ in the form of companies, trusts, societies, associations and other networks which are providing informal finance to small businesses.
Live Case Study – In January 2016, SBI offered loans to women under Mudra scheme. They have launched ‘MUDRA’ loan for women entrepreneurs or Boutique Finance for Women Entrepreneurs – a special loan scheme under Prime Minister MUDRA Yojana – for catering to the financial needs of women entrepreneurs. Around 80 women entrepreneurs received sanctioned letters for loan.
To know more email us at empower@alpashah.in
