What is MUDRA Bank?
Micro Units Development and Refinance Agency Bank, or the MUDRA Bank, is India's public sector financial institution. It provides low-interest loans to microfinance and non-bank financial institutions and credit to small businesses. MUDRA Bank is created for the Pradhan Mantri MUDRA Yojana Scheme. It plans to use last-mile agents to provide services to small business owners outside the service area of existing banks. Approximately 5.77 million small businesses were identified as target customers in the 2013 NSSO survey. Only 4% of these companies receive financing from commercial banks. These banks will also ensure that customers do not fall into debt and lend responsibly. The agency is responsible for developing and refinancing the entire small business sector by assisting financial institutions in providing loans to small businesses engaged in manufacturing, trade, and services. MUDRA will work with banks, IFIs, and other lenders at the state/local level to provide microfinance assistance to the country's small business sector.Eligibility for the scheme
Any Indian citizen with a business plan for income-generating activities in non-agricultural sectors such as processing, manufacturing, trade, or service sectors and a loan requirement of fewer than 10 Lakhs can apply to a bank, MFI, or NBFC for MUDRA loans under the Pradhan Mantri Mudra Yojana.Types of loans provided by the Banks under the scheme
Under the scheme, banks provide loans in three categories; the maximum amount will be allowed according to the category. The categories are as follows-- Shishu- It covers loans up to Rs 50,000.
- Kishor- It covers loans above Rs 50,000 and up to 5 Lakhs.
- Tarun- It covers loans above 5 Lakhs and up to 10 Lakhs.
