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PSU banks kicked off mega push for Pradhan Mantri Mudra Yojana

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State-run PSU banks kicked off mega credit campaigns across the country to give a push to the Pradhan Mantri Mudra Yojana (PMMY) with an aim to generate greater credit to micro enterprises and a sound ecosystem subsequently for bank credit to aspiring entrepreneurs especially small and micro entrepreneurs.

All state-run banks, regional rural banks (RRBs) and private banks are included in the campaign and together they have a target of 1.22 lakh crore during the current financial year for disbursement to small and micro enterprises up to Rs.10 lakh.

Point to be noted that, as of September 22nd, a total of 35.60 lakh borrowers have availed of credit under MUDRA to the tune Rs.24,123 crore. Of these, 52 per cent of beneficiaries are women and about 50 per cent are new enterprises.

All you need to know about MUDRA Bank:

Micro Units Development and Refinance Agency (MUDRA) Bank is a public sector financial institution launched by Prime Minister Narendra Modi earlier this year. It provides loans at low rates to microfinance institutions and non-banking financial institutions which then provide credit to MSME’s.

The MUDRA banks will be set up under the Pradhan Mantri MUDRA Yojana scheme. It will provide its services to small entrepreneurs outside the service area of regular banks, by using last mile agents.

The bank will have a initial corpus of Rs.20,000 crore and a credit guarantee fund of Rs.3,000 crore. The bank will initially function as a non-banking financial company and as a subsidiary of the Small Industries Development Bank of India (SIDBI). However, later it will be made into a separate company. It will also serve as a regulator for other Micro-Finance Institutions (MFIs) and provide them refinancing services. It will provide guidelines for MFIs and give them ratings.

The bank classifies its clients into three categories and the maximum allowed loan is based on the category itself:

  • Shishu – Allowed loans up to Rs.50,000
  • Kishore – Allowed loans up to Rs.5,00,000
  • Tarun – Allowed loans up to Rs.10,00,000

Small manufacturing unit, Shopkeepers, Fruits / Vegetable vendors and Artisans are eligible to borrow from MUDRA Bank.