MUDRA Bank-A Policy Initiative towards Strengthening Micro, Small and Medium Enterprises (MSMEs)

Micro Small and Medium Enterprises (MSMEs) play a significant role in the industrial development of the Indian economy The contribution of manufacturing MSMEs to GOP is almost 7.04%, of services sector MSMEs is 30.50%, thus overall of MSMEs sector is 37.54% and that of 40% to the share of exports, and 45% share in manufacturing output. This sector generates around 100 million job opportunities over 46 million units spread across the country. But the major bottleneck that this sector is facing is lack of financial support. More than 90% of the Non Corporate Small Business Sector (NCSB) does not have access to the formal sources offinance. Hence there was an urgent need to catering to the financial needs of this sector, otherwise this sector would remain unfunded and a part of production labour force would remain unemployed. Bringing MSMEs in the mainstream will not only help in improving quality of life of these entrepreneurs but will also contribute substantially to employment generation in the economy thereby achieving higher GDP growth rate. Setting up of MUDRA -Micro Unit Development and Regulatory Agency Ltd. is a policy initiative of Govt. of India for catering to the needs of the informal sector or the Non Corporate Small Business Sector (NCSB) segment and an effort towards bringing them in the mainstream. As on 11th march 2016 the total number of PMMY loans sanctioned are- 2,98,06972,Banks have so far sanctioned overRs.1,17,17. 77 crore and the total amount disbursed is around 1,11,388.81 crore under the scheme of Pradhan Mantri MUDRA Yojana. Thus MUDRA Bank is expected to give MSMEs the much needed impetus to effectively manage and grow their business The broad objective of the paper is to highlight the role and responsibility of MUDRA Bank in financing MSMEs and to have an overview of the implementation of Pradhan Mantri MUDRA Yojana across the country till March 2016.