MUDRA: Small businesses Loan up to Rs. 50,000; small and medium enterprises sector up to Rs. 10 lakh.

Those engaged in micro & marginal businesses like fruit sellers, vegetable vendors, mechanics, barbers or / cobblers, will get  a total of Rs 1.22 lakh crore of loans this financial year (2015-15) through the recently launched Micro Units Development and Refinance Agency (MUDRA), finance minister Mr. Arun Jaitley said on recently.

Launching a drive under the scheme at a Punjab National Bank (PNB) event at Newdelhi, Mr. Jaitley said Rs. 24,000 crore had been given as advances to 37 lakh (3.7 million) small entrepreneurs through MUDRA. The ministry aims to cover 12.5-17.5  million small business people under MUDRA in 2015-16, he added. 

The scheme was launched by the prime minister in April 2015 to  promote micro finance institutions & banks, which would in turn provide loans to small and vulnerable sections of businesses. The initial corpus was Rs. 20,000 crore and a credit guarantee fund of Rs. 3,000 crore were provided by banks from their priority sector lending shortfall.

A non-banking finance company and part of the Small Industries Development Bank of India, it will later take the form of a bank, through legislation in the next year (2016). Small businesses can take a loan up to Rs. 50,000; the highest bracket of loans available to the small and medium enterprises sector would be up to Rs. 10 lakh.

The current focus is on small businesses, encompassing a range such as shopkeepers, fruit sellers, vegetable vendors, mechanics, barbers, cobblers and small units, all of which need to borrow from money lenders & informal sources.

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