Microfinance with Reference to Micro Units Development and Refinance Agency Banks (MUDRA Banks)

Abstract

India is considered as one of the largest microfinance centre in the world nowadays. In India poverty is considered as a menace. For the poverty alleviation the Government of India started various programmes from time and again. The microfinance institutions came forward to fulfil these gaps but the outreach is small as compared to the requirement and potential but some progress had been seen in this regard. Government must power the microfinance institutions for mobilizing savings, with increase demand for the rural finance. However, keeping in mind the recent experiences, and for the better growth these microfinance institutions need to managed in a better way and they must be provided with adequate finance which fulfil the needs of poor and also provide them a social responsibility which is most important for the growth of these microfinance institutions and for alleviating poverty from the country. In India, small businesses play an important role not only in contributing to nation GDP (Gross Domestic Product) but also by providing employment to a large no of people.  After identifying the importance of self-employment people and small business units, government of India launched MUDRA Banks (Micro Units Development and Refinance Agency Banks) to address the financial and other constraints. It is envisaged that it will benefit small entrepreneurs and will also act as a governing body for Micro- Finance Institutions (MFIs). In this paper an attempt is made to find out how MUDRA Banks are empowering the different microfinance schemes which are empowering rural finance development in India.