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International Journal of Trade & Commerce-IIARTC
Impact Factor (IF):5.135 (COSMOS), IF:7.249 (ISRA), IF:3.721 (ISI)
ISSN:2277-5811 (P), ISSN:2278-9065 (O)
Frequency: Half Yearly
Mudra Bank: An Innovative Financial Architecture to Lift the Micro and Small Businesses in India
Author:Pankaj Kumar Bharti*, Vinay Arya
Abstract:
The growth of the Indian economy depends critically on the rise of the non-corporate business sector. The Non-Corporate Small Business Sector (NCSBS), which is the kamadhenu (job-intensive) but credit-starved sector of our economy, is the main source of the issue. 128 million employment and millions of rural and semi-urban entrepreneurs are produced by these 58 million non-formal micro businesses. The performance of this industry directly impacts the national economy. Two- thirds of these facilities are administered by Scheduled Castes, Scheduled Tribes, and Other Backward Classes. Banks, however, only supply 4% of the credit required by this sector. The majority of this sector lacks access to formal funding sources. The Government of India established Micro Units Development & Refinance Agency Ltd. (MUDRA) in order to satisfy the needs of the NCSBS segment, sometimes referred to as the informal sector, and integrate them into the financial system. It will be established as a branch of SIDBI, an organisation that has spent the past 25 years supporting India's small-scale industries. It was established as an apex refinancer and serves as a regulator for "Micro Finance Institutions (MFIs)" for the benefit and development of the micro- and small-business sector. 5.75 crore small business units in India would receive services from the MUDRA bank, many of whom are now unable to obtain loans through the traditional banking system. The purpose of the paper is to draw attention to the MUDRA Yojana, a cutting-edge financial system that has the potential to drastically alter the Indian economy. MUDRA Bank seeks to support micro and small businesses in India through refinancing, aid with development, and financial inclusion of the missing middle.
Keywords:MUDRA, NCSBS, PMMY, MFIs, NBFC
DOI:
International Journal of Trade & Commerce (Vol: 11 Issue:2)
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