• 5.77 crore enterprises

  • 45% of India's GDP

  • Gross Value Addition
    is Rs. 6.28 lakh crore.

  • This sector employs
    46 crore people.

  • Yet less than 4% of financial needs met by Banks.

Thank you Shri Arun Jaitley for FUNDING THE UNFUNDED

Micro Units Development and Refinance Agency (MUDRA) Bank to provide institutional finance to micro and small enterprises.

Para 34 of Union Budget 2015 speech

Madam Speaker, our government firmly believes that development has to generate inclusive growth. While large corporate and business entities have a role to play, this has to be complemented by informal sector enterprises which generate maximum employment. There are some 5.77 crore small business units, mostly individual proprietorship, which run small manufacturing, trading or service businesses. 62% of these are owned by SC/ST/OBC. These bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access formal systems of credit. I, therefore, propose to create a Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore, and credit guarantee corpus of Rs. 3,000 crore. MUDRA Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana. In lending, priority will be given to SC/ST enterprises. These measures will greatly increase the confidence of young, educated or skilled workers who would now be able to aspire to become first generation entrepreneurs; existing small businesses, too, will be able to expand their activities. Just as we are banking the un-banked, we are also funding the un-funded.


Shri. Arun Jaitley

PIB press release on Micro Units Development and Refinance Agency (MUDRA) Bank

According to the NSSO survey of 2013, there are 5.77 crore small business units, mostly individual proprietorships, which run small manufacturing, trading or services activities.

About Us

The Action Committee for Formal Finance for Non-corporate Small Business is a group constituted by leading organisations from across India, who have come together to support the government’s policy announcement to create a new financial architecture for non-corporate small businesses.

Role of NBFCs

NBFCs are better placed than Banks to serve Small Business:

NBFCs focused on serving low income families and Micro, Small and Medium Enterprises (MSMEs) have been playing a very important role in promoting financial inclusion by providing loan products to these credit starved sectors.

Need for SBFCs/ I

Need to create Small Business Finance Companies to support Small Business:

It is therefore necessary to rationally classify the NBFCs and create a separate category of Small Business Finance Institutions among the NBFCs ...