Prime Minister Narendra Modi will launch the Micro Units Development and Refinance Agency Ltd. (MUDRA) bank at the Vigyan Bhavan in the national capital today.
In his Budget Speech for Financial Year 2015-16, Union Finance Minister Arun Jaitley had proposed the creation of the bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of Rs. 3,000 crore.
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 would include the laying down policy guidelines for micro enterprise financing business; the registration of MFI entities; the accreditation /rating of MFI entities; the laying down responsible financing practices to ward off over indebtedness and ensure proper client protection principles and methods of recovery; the development of standardised set of covenants governing last mile lending to micro enterprises; the promotion of right technology solutions for the last mile; the formulation and running of a credit guarantee scheme for providing guarantees to the loans/portfolios which are being extended to micro enterprises and so on.
These measures to be taken up by MUDRA are targeted towards mainstreaming young, educated or skilled workers and entrepreneurs including /women entrepreneurs.
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Since the enactment for MUDRA is likely to take some time, it is proposed to initiate MUDRA as a unit of SIDBI to benefit from SIDBI's initiatives and expertise.
