Mudra Yojana is a financial effort aimed at assisting micro-businesses by giving them adequate finances to enable them to grow. On April 8, 2015, the government launched its MUDRA Bank (Micro Units Development and Refinance Agency) project as part of the Jan Dhan Yojana.
Objectives of Mudra Yojana
Mudra Yojana was designed with a number of objectives in mind that have to be satisfied during its implementation. The following are some of the most notable
- In order to provide policy recommendations for the financing of small and micro-businesses.
- Obtaining and regulating registration for all Microfinance Institutions and related organisations.
- For aiding small businesses in their growth and expansion.
- Assisting low-income people in launching and expanding enterprises.
- To contribute to the provision of simple credit access for the unbanked and the lowering of their financing expenses.
- To give SC/ST borrowers an edge.
- All Microfinance Institutions that do business, manufacture, or provide services must be regulated.
Uses of Mudra Yojana
The financing available under this plan may be used for the following purposes:
- A commercial vehicle loan.
- A working capital loan.
- There is a loan available for equipment and machinery.
- Traders and stores are eligible to apply for business funding.
Eligibility of Mudra Yojana
Mudra loans would be made available by all Public Sector Banks, State Cooperative Banks, Regional Rural Banks, and Urban Co-operative Banks to all non-farm income-generating firms in commerce, manufacturing, and services with credit requirements of less than Rs.10 lakh (Pradhan Mantri Mudra Yojana).
- Verification of Identity
- Proof of the company’s identity and address (relevant certificates & licenses).
- If there is any evidence, it will fall under this category.
- The accounts for the preceding six months are displayed.
- Income tax returns and financial statements for the prior two years are required.
- A Memorandum of Association (MoA) or a Partnership (Partnership) A deed can be used to establish the existence of a business.
About Mudra bank
is a bank that specialises in ‘financing’ the ‘unfunded.’ This will provide up to Rs 10 lakh in finance to small enterprises and act as a regulator for ‘Micro-Finance Institutions’ (MFIs). MUDRA Bank would also refinance Micro-Finance Institutions via the Pradhan Mantri Mudra Yojana. (The Hindi word mudra means “money.”)
Mudra Bank’s primary objectives are to encourage entrepreneurs and small enterprises to enhance their skills and operations, reduce debt, and build a structured loan system (finance). Mudra Bank’s focus will be on agriculture and self-employment.
Responsibilities of Mudra Bank
- Policy suggestions for the micro/small business financing market are being developed.
- Firms that provide micro-finance must be registered and regulated. MFIs have been recognised and graded.
- To assist low-income individuals and families in creating and expanding their small businesses.
- To aid in increasing unbanked people’s access to credit and decreasing credit costs. Access to Institutional Finance for Small Business Units (SBU).
- Creating sensible financial approaches to minimise over-indebtedness, as well as client protection policies and recovery plans.
- Standardized covenants are being created for last-mile financing to micro/small firms.
Products and Offerings of Mudra Bank
Small manufacturing units, proprietorship/partnership firms, shopkeepers, fruit/vegetable sellers, hair cutting saloons, beauty parlours, transporters, truck operators, hawkers, co-operatives or bodies of individuals, food service units, repair shops, machine operators, small industries, artisans, food processors, self-help groups, professionals and service providers, and other businesses/entrepreneurs/units with a financing would all be covered.