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Posted by on Dec 1, 2015 in Schemes |

MUDRA BANK SCHEME: Last Mile Financer

The government set up Micro Units Development and Refinance Agency (MUDRA) with initial refinance corpus of Rs 20000 Cr and another Rs 3000 Cr for credit guarantee corpus has been allotted. The purpose of MUDRA is to provide funding to the non-corporate small business sector through various Last Mile Financial Institutions like Banks, NBFCs and MFIs.


Three Categories

  • Shishu: covering loans up to Rs. 50,000.
  • Kishor: covering loans above Rs. 50,000/- and up to Rs. 5 Lakh.
  • Tarun: covering loans above Rs. 5 Lakh and up to Rs. 10 Lakh.


Note: It would be ensured that at least 60% of the credit flows to Shishu Category Units and the balance to Kishor and Tarun Categories.


Business Covered

Within the framework and overall objective of development and growth of Shishu, Kishor and Tarun Units, the products being offered by MUDRA have been designed to meet requirements of different sectors / business activities that are:

  • Sector / activity specific schemes: Land Transport Sector, Textile Products, Food Products and Personal services like tailoring, saloon, gymnasium etc.
  • Micro Credit Scheme (MCS): Financial support to MFIs for on lending to individuals/SHGs.
  • Refinance Scheme for Regional Rural Banks (RRBs) / Scheduled Co-operative Banks
  • Mahila Uddyami Scheme
  • Business Loan for Traders & Shopkeepers:  financial support for on lending to individuals for running their shops / trading & business activities / service enterprises.
  • Missing Middle Credit Scheme
  • Equipment Finance for Micro Units


Innovative Offerings

  • MUDRA Card:The card offering will help provide pre-approved credit line to the members by providing a card.
  • No Collateral Requirement: To mitigate the issue of collaterals, MUDRA will be offering a Credit Guarantee Product.


The MUDRA Bank would primarily be responsible for –

  • Laying down policy guidelines for micro/small enterprise financing business
  • Registration of MFI entities
  • Regulation of MFI entities
  • Accreditation /rating of MFI entities
  • Laying down responsible financing practices to ward off indebtedness and ensure proper client protection principles and methods of recovery
  • Development of standardized set of covenants governing last mile lending to micro/small enterprises
  • Promoting right technology solutions for the last mile
  • Formulating and running  a Credit Guarantee scheme for providing guarantees to the loans which are being extended to micro enterprises
  • Creating  a good architecture of Last Mile Credit Delivery to micro businesses under the scheme of Pradhan Mantri  Mudra Yojana.


  • Apex Refinancer
  • MUDRA Architecture Indigenously Conceived for Indian context
  • Inclusion of Last Mile Financiers – a game changing idea
  • Help expand Access to finance for micro enterprises
  • Lower Cost of Finance
  • Mass Entrepreneurship Development and Growth
  • Employment Generation, Higher GDP Growth.
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