As Mudra refinance loses sheen, focus shifts to credit guarantee

Any loan by a financial institution to an SME below Rs 10 lakh is termed a Mudra loan

After getting a muted response from banks to its refinance facility, the  Micro Units Development Refinance Agency (Mudra), the non-banking finance (NBFC) arm of the Small Industries Development Bank of India, will focus on credit guarantee. 

A little over 40 banks are in the process of availing a credit guarantee from Mudra. Another eight recently bought insurance cover to the extent of about Rs5,000 crore, Jiji Mammen, chief executive, told this newspaper. After demonetisation, the demand for refinance from Mudra had substantially come down. Demonetisation had hit the demand for credit among small and medium 

enterprises (SMEs) and banks were sitting on