Pradhan Mantri MUDRA Yojana launched for MSMEs

The Prime Minister of India has with the objective to harness the micro businesses in India launched the Pradhan Mantri Micro Units Development and Refinance Agency (“MUDRA”) Yojana on 8th April, 2015.

 MUDRA will regulate Micro-finance Institutions (“MFI”) and work as a refinancing institution for all MFI & Non-Banking Finance Companies (“NBFCs”) engaged in financing of small businesses, societies, trusts, section 8 companies, co-operative societies, small banks, scheduled commercial banks and regional rural banks engaged in lending to micro/small business entities. It would cater to the financial needs of self- employed & Micro Small and Medium Enterprises (“MSME’s”) by offering a loan of up to INR 10 lakhs (Rupees Ten Lakhs Only), who currently find it difficult to access credit from the banks.

 The scheme contemplates setting up a MUDRA Bank through a statutory enactment under the Pradhan Mantri MUDRA Yojana scheme. MUDRA Bank will be registered as an NBFC with the Reserve Bank of India and would be a wholly-owned subsidiary of the Small Industries Development Bank of India. The MUDRA Bank would partner with state /regional level intermediaries to provide finance to MSMEs. The Bank will provide loans to small businesses/entrepreneurs depending on the growth and development stage of their businesses.

 It contemplates 3 stages of loan limits i.e.

Sr No

Category

Loan Limit

i Shishu The first stage of business, loan cover upto Rs 50,000/-.
ii Kishor Loan ranging from Rs 50,000/- to Rs 5 lakhs/-
iii Tarun The final stage, loan ranging from Rs 5-10 lakhs/-
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