PM launches Rs. 20,000-cr MUDRA Bank; Bill for the Bank in 6-12 months
Thirty-Seven year old Babita from Hapur, and 43-year-old Pushpa from Muradnagar are among the first five beneficiaries of the credit facility – MUDRA Yojana.
Rajesh Jindal (Hapur), Samiruddin (Trans Hindon, Ghaziabad), and Mahesh Chaudhry (Dadri) were the others who received the cheque from Prime Minister Narendra Modi under the Pradhan Mantri MUDRA (Micro Units Development and Refinance Agency) Yojana or PMMY. The facility was launched by Modi on Wednesday.
Till now, these owners of tailoring shop, barber shop, or cosmetic shops were forced to take loans from the unorganised sector at exorbitant interest rates, going even up to 100 per cent. But, now with this scheme they got loans of up to Rs. 50,000 from banks at much lower rates.
Modi, giving an example of the perception that large industries create more employment, said that a closer look at data reveals that only 1.25 crore people find employment in large industries, whereas small enterprises employ 12 crore people in the country.
He said that while there are a number of facilities provided for the large industries in India, there is a need to focus on the 5.75 crore self-employed people, who need Rs. 11 lakh crore worth of funds, with an average per unit debt of merely Rs. 17,000, to employ 12 crore Indians. He said that these facts, when brought to light, led to the creation of the MUDRA Bank
Generating employment and promoting self-employment is a priority for the government, the Prime Minister said, adding, “Providing loans to small entrepreneurs will give a big push to the GDP.”
Small borrowers repay loans promptly, he said, stressing that “saving is a habit in India and there is a need to (give a) push to this traditional strength.”
Meant to ‘fund the unfunded,’ the PMMY aims to provide financial assistance to the “unfunded” small entrepreneurs who provide employment to a large number of people. Announced in the Budget, the new institution has initially been set up as NBFC (Non Banking Financial Company) and as a subsidiary of SIDBI (Small Industries Development Bank of India).
Subsequently it will become a full-fledged institution set up under legislation. This will work as refinance, credit guarantee and also as a regulator of Micro Financial Institutions.
At the event, Finance Minister Arun Jaitley expressed regret that 20 per cent of the country’s population is dependent on 5.7 crore micro and small entrepreneurs, who do not have access to institutional credit.
Referring to the Land Bill, Jaitley said about 300 million landless people would get employment in industrial corridors to be set up in rural areas.