Pradhan Mantri Mudra Yojana & its Offerings
Tue Apr 09 2019 / By: Nupur SharmaIn April 2015, the Government of the Union Budget was established as the MUDRA (MicroUnits Development and Refinancing Agency Limited) Bank. This aims to provide the sector of micro enterprises with integrated financial support, including, by name a few, small-scale production facilities, food service units and small industries. The fundamental reason for MUDRA is to expand the institutional finance facility to include small businesses involved in different commercial, production and service activities. PMMY was launched in conjunction with MUDRA (Pradhan Mantri MUDRA Yojana). Under the PMMY system everybody can request loans of up to Rs. 10 lakhs in the non-farm sector.
Types of Pradhan Mantri MUDRA Yojana Offerings
Here are the key types of Pradhan Mantri Mudra Yojana Offerings:
Micro Credit Scheme: This scheme provides financial support for businesses with loans of up to 1 lakh by Micro Financial Institutions. Usually, individuals involved in specific micro-enterprise activities as well as different joint liability groups (JLGs) and self-help groups (SHGs), could be used to deliver such loans.
Women Enterprise Programme: This scheme is an important part of MUDRA Yojana, which targets women entrepreneurs. Its objective is to foster the establishment of various micro-enterprises for women entrepreneurs, female joint responsibility groups and self-help groups. In such cases, for example, a reduction in interest rates of up to 0.25% on loans granted may be permitted with special concessions.
Refinance scheme for Banks: MUDRA makes refinancing of loan amounts (up to Rs 10 lakhs per unit) easier, including Scheduled Co-operatives Banks, Regional Rural Banks and Commercial Banks. The refinancing facility is only available if these business loans for microenterprises activities have been extended. Banks which are eligible for the refinancing facility must meet from time to time notified requirements.
Mudra Card: MUDRA card is an innovative credit product that allows small businesses access to credit easily while offering cardholder flexibility. It can be used as a overdraft (loan) limit credit card and can also be used as a debit card for ATM withdrawal facilities. Under its unique cash loan arrangement Mudra Card can be used by companies to acquire operating capital.
Credit Guarantee Fund: This includes creation and use of a special fund referred to as the Micro - Units Credit Guarantee Fund (CGFMU), also known as a portfolio loan guarantee. The Fund is managed by National Credit Guarantee Trustee Company Ltd. to facilitate receipt of micro - loans by eligible companies.
Equipment Finance Scheme: This scheme under a loan scheme for the MUDRA allows the purchase and upgrade of qualification equipment / machinery by small companies, small businesses and micro-units. This encourages companies to increase overall productivity and efficiency in their companies by improving their production techniques.
Credit to Micro Enterprises: One of MUDRA's fundamental motives is both to maximize the number of benefits and beneficiaries. Much of the Indian population currently operates in particular fields including land transportation, food production, textile production and community services but are not limited to these sectors. Different tailored products and sc to meet the growth requirements of these industries