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Tuesday, September 13, 2016

Mudra Bank Loan 2016 - Process, Documents, Eligibility

Mudra Bank Loan 2016 - All about Micro Units Development and Refinance Agency Ltd (MUDRA) Bank Launched by Prime Minister Narendra Modi.

Now the farmers will now be eligible for input subsidy if 33 per cent of their crop has been damaged, as opposed to 50 percent or more, which was the norm till now. PM also launched the MUDRA bank with a corpus of Rs. 20,000 crores and credit guarantee of Rs. 3000 crore.

A vast part of the non-corporate sector operates as unregistered enterprises and formal or institutional architecture has not been able to reach out to meet its financial requirements.

The Bank will be responsible for refinancing micro-finance institutions in the business of lending to small entities.

The primary product of MUDRA will be refinance for lending to micro businesses and units. The initial products and schemes under this umbrella have already been created and the interventions have been named:

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

MUDRA's role will include

✓ Laying down policy guidelines for micro enterprise financing business, registration of MFI entities

✓ Accreditation, rating of MFI entities

✓ Laying down responsible financing practices to ward off over-indebtedness and ensure proper client protection principles and methods of recovery

✓ Development of standardised set of covenants governing last-mile lending to micro enterprises

✓ Promoting right technology solutions for the last mile

✓ Formulating and running a credit guarantee scheme for providing guarantees to loans and portfolios being extended to micro enterprises

✓ Support development and promotional activities in the sector

✓ Creating a good architecture for last-mile credit delivery to micro businesses

✓ The measures to be taken up by MUDRA are targeted towards mainstreaming young, educated or skilled workers and entrepreneurs, including women entrepreneurs.

Assuming Mudra Bank lends at 7-10.5% to MFIs and NBFC-MFIs are able to get 20-40% of its funding from MUDRA Bank
CreditPlus 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 BusinessFinance Entities”

✓ Synergies with National Rural Livelihoods Mission

✓ Synergies with National Skill Development Corporation

✓ Working with Credit Bureaus

✓ Working with Rating Agencies
Funding and Liquidity
✓ Increased liquidity support to MFIs

✓ Increased access to low cost funding for MFIs could lead to a reduction in the cost of funds for MFIs, given that MUDRA bank is likely to have access to low cost funds and would lend at lower rates to the MFIs which could be passed on to the end borrower.

Contact Address : 1105, Kailash Building, 11th Floor; 26 Kasturba Gandhi Marg; New Delhi 110001

Contact Number : +91 11 23357940-50
1. Mumbai: Tel.: + (91 22) 24331046/53/62/74/86/87,

2. Chennai: Tel + (91 44) 2434 0043/9659/8080, 2433 0724/ 3293/3294,

3. Kolkata: Tel + (91 33) 2287 8839 /2287 6617/ 2283 1411/ 2280 0008,

4. Bangalore: Tel + (91 80) 2559 7401/4049

5. Ahmedabad: Tel + (91 79) 2658 4924/5049/2008,

6. Hyderabad: Tel +(91 40) 2373 5061/7251,

7. Pune: Tel + (91 20) 2552 0194/95/96,

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