1/10/2016

MudraBankDecodedDayTodayGK

MudraBankDecoded
ThePrimeMinisterNarendraModilaunchedthepromisedMicroUnitsDevelopmentand
RefinanceAgencyLtd(MUDRA)Bankon8April,2015withacorpusofRs20,000croreanda
creditguaranteecorpusofRs3,000crore.
HQNewDelhi
MicroUnitsDevelopmentandRefinanceAgencyBank(orMUDRABank)isapublicsectorfinancial
institutioninIndia.Itprovidesloansatlowratestomicrofinanceinstitutionsandnonbanking
financialinstitutionswhichthenprovidecredittoMSMEs.ItwaslaunchedbyPrimeMinister
NarendraModion8April2015.
Wikipedia

MUDRABANKISFORWHOM
mostindividualsthoselivinginruralandinteriorpartsofIndiaandneverhadaccesstoinsurance,
credit,loansandotherfinancialinstruments,thosearedependonlocalmoneylendersforcredit.For
thoseTheloancomesathighinterestandoftenwithunbearableconditionswhichmakethemmore
poorerandpoorer.
EligibletoborrowfromMUDRAbank:
Smallmanufacturingunit
Shopkeepers
Fruits/Vegetablevendors
Artisans
Therearecloseto5.77croreSmallscalebusinessunits,mostlysoleproprietorships,which
undertaketrading,manufacturing,retailandothersmallscaleactivities.Comparethiswiththe
organisedsectorandlargercompaniesthatemploy1.25croreindividuals.Clearly,thepotentialto
harnessandnurturethesemicrobusinessesisvastandthegovernmentrecognisesthis.Today,this
segmentisunregulatedandwithoutfinancialsupportorcoverfromtheorganisedfinancialbanking
chromeextension://iooicodkiihhpojmmeghjclgihfjdjhj/front/in_isolation/reformat.html

1/6

1/10/2016

MudraBankDecodedDayTodayGK

system.
NSSOSurvey(2013)

OBJECTIVEOFMUDRABANK
#Regulatethelenderandtheborrowerofmicrofinanceandbringstabilitytothemicrofinance
systemthroughregulationandinclusiveparticipation.
#ExtendfinanceandcreditsupporttoMicrofinanceInstitutions(MFI)andagenciesthatlend
moneytosmallbusinesses,retailers,selfhelpgroupsandindividuals.
#RegisterallMFIsandintroduceasystemofperformanceratingandaccreditationforthe
firsttime.ThiswillhelplastmileborrowersoffinancetoevaluateandapproachtheMFIthatmeets
theirrequirementbestandwhosepastrecordismostsatisfactory.Thiswillalsointroduceanelement
ofcompetitivenessamongtheMFIs.Theultimatebeneficiarywillbetheborrower.
#Providestructuredguidelinesfortheborrowerstofollowtoavoidfailureofbusinessor
takecorrectivestepsintime.MUDRAwillhelpinlayingdownguidelinesoracceptableproceduresto
befollowedbythelenderstorecovermoneyincasesofdefault.
#Developthestandardisedcovenantsthatwillformthebackboneofthelastmilebusinessin
future.
#OfferaCreditGuaranteeschemeforprovidingguaranteestoloansbeingofferedtomicro
businesses.
#Introduceappropriatetechnologiestoassistintheprocessofefficientlending,borrowingand
monitoringofdistributedcapital.
#BuildasuitableframeworkunderthePradhanMantriMUDRAYojanafordevelopinganefficient
lastmilecreditdeliverysystemtosmallandmicrobusinesses.

BENEFITSOFMUDRABANK
#ProvidingLowcostfundingforMFI(microfinanceinstitutes).PriorityforSC/STsinLending.
#ItwillincreaseliquidityandAccessforfundsforSmallscalebusiness.
#Bycombiningtheirintegritywithcapital(MUDRA),itwouldbecomethekeytotheirsuccess

chromeextension://iooicodkiihhpojmmeghjclgihfjdjhj/front/in_isolation/reformat.html

2/6

1/10/2016

MudraBankDecodedDayTodayGK

#UniformityinregulationsandbestpracticesfortheSHGBanklinkageprogramme,NBFCMFIs,
andtrusts/societies/notforprofitNBFCs/Section25companiesengaginginMFIactivitiesasMUDRA
BankwouldbethesoleregulatorforallplayersintheMFIsector.

MUDRAOFFERS
MUDRABankhasrightlyclassifiedtheborrowersintothreesegments:
Thestarters,
Themidstagefinanceseekersand
Thenextlevelgrowthseekers.
Toaddressthethreesegments,MUDRABankhaslaunchedthreeloaninstruments:
Shishu:coversloansuptoRs50,000/
Kishor:coversloansaboveRs50,000/anduptoRs5lakh
Tarun:coversloansaboveRs5lakhanduptoRs10lakh.
RecentlyGovt.Hasdecidedtoprovideanadditionalfundof1trillion(US$15billion)tothemarket
andwillbeallocatedas
40%toshishu
35%tokishor
25%totarun
AfterYouprepareyourbusinessplanandyouselectyourbusinesscategories(asmentioned
above),youhavetocontactyournearestPublicorPrivatebankwhereyoucanapplyforBusiness
loanunderPRADHANMANTRIMUDRAYOJANA.
Note:Assomeusersgotconfused,mudrabankisnotaseparatebank(likeSBIorBOB)itis
governmentsfinanceschemetoprovidebusinessloantonewsmallbusinessinindia.Toget
businessloanunderMudraYojana,youhavetocontactyournearestpublic/privatebank.
Initially,sectorspecificschemeswillbeconfinedtoLandTransport,Community,Social&Personal
Services,FoodProductandTextileProductsectors.Overaperiodoftime,newschemeswillbe
launchedtoencompassmoresectors.
chromeextension://iooicodkiihhpojmmeghjclgihfjdjhj/front/in_isolation/reformat.html

3/6

1/10/2016

MudraBankDecodedDayTodayGK

MUDRAoperatesasarefinancinginstitutionthroughState/Regionallevelintermediaries.It
refinancesNBFCs/MFIsandalsobanks,primarylendinginstitutionsetc.

FUTUREGOODIES
#MUDRACard:AfteryourloanhasbeensanctionedfromMudraYojana,youwillgetMUDRA
CARD,acardlikecreditcardwhichyoucanusetobuyyourbusinessrawmaterialetc.MudraCards
Limitwillbe10%ofyourbusinessloan(subjecttoRs.10000maximum).
#PortfolioCreditGuarantee
#CreditEnhancement

MUDRALOANMELA
ThegovernmentisorganisingMUDRAloanmelasindifferentpartsofthecountry.Thesemelasare
organisedforfewdayswhereloansforsmallbusinessfundingcouldbeapplied.Inthemelas,loans
aregrantedrangingfromRs.50,000toRs.10lakh.

CanMUDRAReallyBeaGameChangerforIndia?
Yesitcan.Seetheexistingdemographics.MajorityofIndiansarepoorandliveinruralandinterior
partsofIndia.Mostareexcludedfromgettingfacilitiesthatwouldbetermedverybasic,evenby
Indianstandards.
Mostpeopledonothaveaccesstofarmlandandintheabsenceofjobs,arelefttotheirown
creativitytofeedthemselvesandsurvive.Theyfigureoutwaystodooddjobsinexchangeofmoney.
Mostofthesepeoplebelongtoscheduledcastes,scheduledtribesandotherbackwardclasses.Itis
tobenotedthatmostofthemicroenterprises,retailortradingactivity,areinitiatedandcontrolledby
women,withnoexposuretoeducation,formaltrainingoraccesstoanyformofbankingsupport.
Nowvisualisethis.IfIndiacouldharnessthisfreespiritofenterpriseandoffersomeguidance,
support,trainingandfinancialassistance,thepotentialtogetanimmediatejumpinGDPistherefor
theasking.NarendraModirecognisesthisandwasclearofthepotentialofthislowhangingfruit.
IfMUDRAcancontinuetoretainfocusontheunderprivilegedandextenditsreachtotheinteriors,it
canwellemergeasabiggersuccessstorythanwhatGrameenBankofBangladesheverwasorwill
be.
chromeextension://iooicodkiihhpojmmeghjclgihfjdjhj/front/in_isolation/reformat.html

4/6

1/10/2016

MudraBankDecodedDayTodayGK

Thereisanoldsayingthatgoeslikethis:Giveamanafishyoufeedhimforaday,teachhimhowto
fishandhewillnevergohungry.MUDRABankisastepbythegovernmentthatcanbeagame
changeringivingbirthtoanewsetofentrepreneurs,someofwhommayscaleheightsnotimagined
today.Thisisfarbetterthangivingsubsidy,whichmayseemwelcomingatfirst,butdoeslittletohelp
anindividualstriveforabetterlife.MUDRAisthewaytogo.

DocumentsrequiredforMUDRALoan
1.ProofofidentitySelfcertifiedcopyofVotersIDcard/DrivingLicense/PANCard/Aadhar
Card/Passport.
2.ProofofresidenceRecenttelephonebill,electricitybill,propertytaxreceipt(notolderthan2
months),VotersIDcard,AadharCard&PassportofProprietor/Partners/Directors.
3.ProofofSC/ST/OBC/Minority.
4.ProofofIdentity/AddressoftheBusinessEnterpriseCopiesofrelevantlicenses/registration
certificates/otherdocumentspertainingtotheownership,identityandaddressofbusinessunit.
5.ApplicantshouldnotbedefaulterinanyBank/Financialinstitution.
6.Statementofaccounts(forthelastsixmonths),fromtheexistingbanker,ifany.
7.Lasttwoyearsbalancesheetsoftheunitsalongwithincometax/salestaxreturnetc.
(ApplicableforallcasesfromRs.2Lacsandabove).
8.Projectedbalancesheetsforoneyearincaseofworkingcapitallimitsandfortheperiodofthe
loanincaseoftermloan(ApplicableforallcasesfromRs.2Lacsandabove).
9.Salesachievedduringthecurrentfinancialyearuptothedateofsubmissionofapplication.
10.Projectreport(fortheproposedproject)containingdetailsoftechnical&economicviability.
11.Memorandumandarticlesofassociationofthecompany/PartnershipDeedofPartnersetc.
12.Inabsenceofthirdpartyguarantee,Asset&Liabilitystatementfromtheborrowerincluding
Directors&Partnersmaybesoughttoknowthenetworth.
13.Photographs(twocopies)ofProprietor/Partners/Directors.
*******************
chromeextension://iooicodkiihhpojmmeghjclgihfjdjhj/front/in_isolation/reformat.html

5/6