INDIA - Micro Units Development & Refinance Agency Ltd (MUDRA)

 Micro Units Development & Refinance Agency Ltd (MUDRA)

https://www.mudra.org.in/AboutUs/Genesis

Micro enterprises constitute a major economic segment in our country and provides large employment after agriculture. This segment include micro units engaged in manufacturing, processing, trading and services sector. It provides employment to nearly 10 crore people. Many of these units are proprietary/ single ownership or Own Account enterprises

The Micro Enterprises  Constraints

The major constraints faced by the myriad of the micro enterprises along the length and breadth of the country include :

Access to Finance

Infrastructure Gaps

Lack of growth orientation

Skill Development Gaps

Policy Advocacy Needs

Lack of Market Development / Market Making

Knowledge Gaps

Information Asymmetry

Entry Level Technologies

The biggest bottleneck to the growth of entrepreneurship in the NCSBS is lack of financial support to this sector. The support from the Banks to this sector is meagre, with less than 15% of bank credit going to Micro, Small and Medium Enterprises (MSMEs).

A vast part of the non-corporate sector operates as unregistered enterprises. They do not maintain proper Books of Accounts and are not formally covered under taxation areas. Therefore, the banks find it difficult to lend to them. Majority of this sector does not access outside sources of finance.

The MUDRA Organization - Micro Units Development & Refinance Agency Ltd (MUDRA)

In the above backdrop the Micro Units Development & Refinance Agency Ltd (MUDRA) was set up by the Government of India (GoI). MUDRA has been initially formed as a wholly owned subsidiary of Small Industries Development bank of India (SIDBI) with 100% capital being contributed by it. Presently, the authorized capital of MUDRA is ₹5000 crores and paid up capital is ₹1675.92 crore, fully subscribed by SIDBI. More capital is expected to enhance the functioning of MUDRA.

This Agency would be responsible for developing and refinancing all Micro-enterprises sector by supporting the finance Institutions which are in the business of lending to micro / small business entities engaged in manufacturing, trading and service activities. MUDRA would partner with Banks, MFIs and other lending institutions at state level / regional level to provide micro finance support to the micro enterprise sector in the country.

Micro Finance is an economic development tool whose objective is to provide income generating opportunities to the people at the bottom of the pyramid. It covers a range of services which include, in addition to the provision of credit, many other credit plus services , financial literacy and other social support services.

Roles and Responsibilities of MUDRA

MUDRA has been formed with primary objective of developing the micro enterprise sector in the country by extending various support including financial support in the form of refinance, so as to achieve the goal of “funding the unfunded”. The GOI Press release of 2 March 2015 has laid down the roles and responsibilities of MUDRA.

Subsequently GOI has also decided that MUDRA will provide refinance support, monitor the PMMY data by managing the web portal, facilitate offering guarantees for loans granted under PMMY and take up other activities assigned to it from time to time. Accordingly MUDRA has been carrying out these functions over the last one year.