Micro Units Development & Refinance Agency – Mudra-“Funding the Unfunded”

Abstract

India's New breed Entrepreneurs believe that a great product, a brilliant team and the right business model fueled by funding can accelerate the growth and success of entrepreneurs. This paper aims at understanding the role of government in providing financial support to new generation entrepreneurs with reference to the Pradhan Mantri Mudra Yojana (PMMY). The Government of India (GoI) is setting up a Micro Units Development & Refinance Agency (MUDRA) Bank through a statutory enactment. The Bank would partner with state level / regional level co-ordinators to provide finance to Last Mile Financiers of small / micro business enterprises. The research study aims at understanding the operational effectiveness of the MUDRA scheme by supporting and promoting partner institutions and creating an ecosystem of growth for micro enterprises sector. Every third person in an Indian city today is a youth. By 2020, India is set to become the world's youngest country with 64 per cent of its population in the working age group. India's poverty rate is set to decline from 51% of the population in 1990 to 24%, over the next five years. Encouraging entrepreneurship development at micro enterprise level will help raise the standard of the base level population.