More than five crore small businesses to get access to institutional finance

 The Dollar Business Bureau The Prime Minister of India, Narendra Modi, will be launching on Wednesday, the Micro Units Development and Refinance Agency Ltd (MUDRA) - a Bank that will help the small-scale enterprises. The information to this effect was provided by an official press release of the Ministry of Finance, Government of India. The MUDRA Bank, to be set up, will help all the Micro-Finance Institutions (MFI) involved in the process of extending financial support to the micro and small-scale enterprises. The scheme would be responsible for developing and refinancing all the MFIs involved in lending business to the micro business entities engaged in manufacturing, trading and service activities. MUDRA, which is coming as a financial and developmental support to the small-scale enterprises, would offer its services through the Pradhan Mantri MUDRA Yojana. The MUDRA scheme would provide finance to the Last Mile Financiers of micro business enterprises by also partnering with the State-level coordinators, through a credit-based approach and also a credit-plus solution approach to all such enterprises across the country. The services to be offered by the MUDRA scheme to the micro business enterprises and the related financial institutions include laying down policies, registering MFIs, promoting appropriate technology solutions, guaranteeing loans through credit Guarantee Scheme, among others. According to the National Sample Survey Office (NSSO) 2013 report, there are 5.7 crore small business units in the country, mostly of individual-proprietorship, that run manufacturing, trading and service activities. A major part of the micro and small-scale sector run as unregistered enterprises and the existing infrastructural architectures failed to meet the enterprises’ financial needs. In this regard, the government mulling to providing them a financial and developmental support would definitely help the micro and small-scale industries in a big way.    

This article was published on April 7, 2015.