Primary product of MUDRA Bank

The primary product of MUDRA will be refinance for lending to micro businesses / units under the aegis of the Pradhan Mantri MUDRA Yojana. The initial products and schemes under this umbrella have already been created and the interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur as also provide a reference point for the next phase of graduation / growth for the entrepreneur to aspire for:

  • Shishu: covering loans upto Rs. 50,000/-
  • Kishor: covering loans above Rs. 50,000/- and upto Rs. 5 lakh
  • Tarun: covering loans above Rs. 5 lakh and upto Rs. 10 lakh

Businesses/entrepreneurs/units covered would include proprietorship/partnership firms running as small manufacturing units, shopkeepers, fruits/vegetable sellers, hair cutting saloon, beauty parlours, transporters, truck operators, hawkers, co-operatives or body of individuals, food service units, repair shops, machine operators, small industries, artisans, food processors, self help groups, professionals and service providers etc. in rural and urban areas with financing requirements upto Rs.10 lakh.

The products initially being launched are as under:

  • Sector/activity specific schemes, such as schemes for business activities in Land Transport, Community, Social & Personal Services, Food Product and Textile Product sectors. Schemes would similarly be added for other sectors / activities.
  • Micro Credit Scheme (MCS)
  • Refinance Scheme for Regional Rural Banks (RRBs) / Scheduled Co-operative Banks
  • Mahila Uddyami Scheme
  • Business Loan for Traders & Shopkeepers
  • Missing Middle Credit Scheme
  • Equipment Finance for Micro Units

Credit Plus Approach

MUDRA would also adopt a credit plus approach and take up interventions for development support across the entire spectrum of beneficiary segments. The highlights of such proposed interventions / initiatives are as under:

  • Supporting financial literacy
  • Promotion and Support of Grass Root Institutions
  • Creation of Framework for “Small Business Finance Entities”
  • Synergies with National Rural Livelihoods Mission
  • Synergies with National Skill Development Corporation
  • Working with Credit Bureaus
  • Working with Rating Agencies

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