New Delhi, April 8 (IANS): Prime Minister Narendra Modi on Wednesday launched a bank with a corpus of Rs.20,000 crore to extend credit of up to Rs.10 lakh to small businesses and regulate micro-finance institutions, to promote their growth, add to the country's output and create jobs.
The move is aimed at benefiting some 58 million small businesses in the country, who account for a mere four percent of institutional funding, despite employing over 120 million people, many from unprivileged strata of society, the officials said.
"After 'banking the un-banked' with the Jan Dhan Yojana, it's time to 'fund the unfunded'," the prime minister said at an event to launch what is called Micro Units Development and Refinance Agency - Mudra.
"Mudra is our innovation of funding the unfunded," the prime minister said.
"Millions of common men and women in this country, who run small businesses, have almost remained outside the net of formal institutional finance, in spite of their large contributions to the economy," he said at the event, attended, among others by Finance Minister Arun Jaitley.
"Providing access to institutional finance to such micro and small business units and enterprises will not only help in improving the quality of life of these entrepreneurs, but also turn them into strong instruments of growth and employment generation," the finance ministry said.
The initiative will also lay down the norms for responsible financing practices for micro-finance institutions so that the small businesses do not face hardship over indebtedness, while getting a fair environment for repayment.
In his budget speech delivered on February 28, the finance minister had said that while are were 5.77 crore small businesses in India, mostly individual proprietorships, these bottom-of-the-pyramid entrepreneurs found 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 a credit guarantee corpus of Rs.3,000 crore. Mudra Bank will refinance micro-finance institutions through a Pradhan Mantri Mudra Yojana," he added.
"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."
30 cr landless people to get jobs once land bill is passed: FM
New Delhi, Apr 8 (PTI): About 30 crore landless people will get employment in the industrial corridors following amendments to the land acquisition bill, Finance Minister Arun Jaitley said today.
"I want to make a special mention of poor, dalits, tribals, backwards, those who are landless. The Land Acquisition Bill we are bringing, as per that the industrial corridors which would be set up in the country, those backward people, the 300 million landless people would get employment opportunities," he said.
Speaking at the launch of the Rs 20,000 crore Pradhan Mantri Micro Units Development Refinance Agency (MUDRA) Yojana here, he said it is the priority of the government to provide employment to people and steps are being taken in that direction.
The Finance Minister further said that the institution is an effort towards "funding the unfunded" population of the country.
There are about 5.77 crore micro and small entrepreneurs in the country who do not have access to institutional credit.
Jaitley said about 20 per cent of the country's population is dependent on these micro and small entrepreneurs.
This institution has been created within five weeks after Budget announcement, he said, adding that the MUDRA Bank will refinance micro-finance institutions (MFIs).
This NBFC will be transformed into another development bank in the future, he added.
In his Budget speech, the Finance Minister had proposed the MUDRA with a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore.
The roles envisaged for MUDRA include laying down policy guidelines for micro enterprise financing business and registration of MFI entities as well as their accreditation and rating.
The initial products and schemes under this umbrella have already been created and the interventions have been named 'Shishu', 'Kishor' and 'Tarun' to signify the stages of growth/development and funding needs of the beneficiary micro unit/entrepreneur.