Earlier this year the Prime Minister had launched the Micro Units Development and Refinance Agency Ltd. (MUDRA) to fund the unfunded section of the society. There are 5.7 crores entrepreneurs in the unorganised sector who are responsible for creating 11 crore jobs. There are estimated 24 crore families in India. Thus at the bottom of the economic structure were these unfunded sections of the society. They were dependent upon money lenders for loan on an exploitative rate of interest (24% to 36%). India’s industrial, service and agricultural sector are still not strong enough to absorb them in the employment.
Mundra Yojna has now been launched. There are 120 partners which includes public sector banks, private sector commercial banks, regional rural banks, NBFCs and MFIs. In the current financial year 2015-16; a total amount of Rs.1.22 lakh crores will be given to these unfunded sections of the Indian society. The three categories of loans are; Shishu – upto Rs. 50,000/-; Kishore – Rs. 5,00,000/- and Tarun – Rs. 10,00 000/-. This Yojna will continue for the next few years. The targeted beneficiaries are six crore people who need to be developed into India’s small entrepreneurs. They will all be issued Debit Cards, which will allow them withdrawal of money through ATMs. These people cannot afford securities and hence the requirement of furnishing securities will not applicable for loans to them. These loans will not be given on the strength of personal and political connections but linked to the business proposals of these potential entrepreneurs. At a function in rural Delhi I launched a campaign on the 25th September, 2015 in support of the Mudra Yojna. This was organised by the Punjab National Bank. Vegetable vendors, small shop-keepers, women associated with Beauty Parlours & Boutiques, Mechanics, Electricians, and Plumbers etc. were among the beneficiaries.
Already Rs. 24,000 crores of loans have been distributed. There are 37 lakh beneficiaries as of today. I anticipate that this year the number of beneficiaries crossing 1.5 crores. This number will increase year after year. Past experience has indicated that the recovery rate for such micro finance and similar loans is exceedingly high and the defaulter are few. India may not be able to provide employment to all but our economy will strong enough to provide resources to the weakest to enable them to be self-employed and self-dependent. The model of the present Government is not to give “Buksheesh” but to enable people to make them economically self-sufficient and live a life of dignity. MUDRA scheme will be a game changer over the next few years.