Abstract
The MSME plays a vital role in providing large employment opportunities at comparatively lower capital than large scale industries. It also helps in industrialization of rural and backward areas and assuring more equitable distribution of national income and wealth. However this sector is continuously facing many challenges and the biggest bottleneck to this sector is the weak institutional financial support. Therefore, in order to provide more institutional finance to the sector, “funding the unfunded” and promote entrepreneurship and self employment in the country government need a specialized financial institution. Thus, Government has created MUDRA. The main objectives of MUDRA are to create an inclusive, sustainable and value based entrepreneurial culture for achieving economic success and financial security and more income and employment opportunities which are the preconditions for inclusive growth. Through establishment of MUDRA, this sector can be used an important tool to achieve financial inclusion and inclusive growth. MUDRA provides refinance support to banks and MFIs for lending to micro units having loan requirements up to 10 lakh.
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