What is MUDRA?

MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., is a new institution
being set up by Government of India for development and refinancing activities relating to micro
units. It was announced by the Hon’ble Finance Minister while presentinng the Union Budget for FY
2016. The purpose of MUDRA is to provide funding to the non corporate small business sector.

What are the offerings of MUDRA? How will MUDRA function?

 Under the aegis of Pradhan Mantri MUDRA Yojana, MUDRA has already created its initial products / schemes.The interventions have been named 'Shishu', 'Kishor' and 'Tarun' to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next
phase of graduation / growth to look forward to :
a. Shishu : Covering loans upto 50,000/-
b. Kishor : Covering loans above 50,000/- and upto 5 lakh
c. Tarun : Covering loans above 5 lakh to 10 lakh

MUDRA will be operating as a refinancing institution through state/regional level intermediaries. MUDRA's
delivery channel is conceived to be through the route of refinance primarily to NBFCs / MFIs, besides other
intermediaries including banks, Primary Lending institutions, etc.

At the same time, there is a need to develop and expand the delivery channel at the ground level. In this
context, there is already in existence, a large number of 'Last Mile Financiers' in the form of companies, trusts,
societies, associations and other networks which are providing informal finance to small businesses.


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