'Micro Units Development and Refinance Agency Bank (or 'MUDRA Bank[1]) is a public sector financial institution in India.

It provides loans at low rates to micro-

finance institutions and non-banking financial institutions which then provide credit to MSMEs. It was launched by Prime Minister Narendra Modi on 8 April 2015.[2]

The formation of the agency was initially announced in the 2015 Union budget of India in February 2015.[3][4] It was formally launched on 8 April.[2]
The MUDRA banks were set up under the Pradhan Mantri MUDRA Yojana scheme. It will provide its services to small entrepreneurs outside the service area of regular banks, by using last
mile agents. About 5.77 crore (57.6 million) small business have been identified as target clients using the NSSO survey of 2013. Only 4% of these businesses get finance from regular banks.
The bank will also ensure that its clients do not fall into indebtedness and will lend responsibly. [3][5]
The bank will have an initial capital of ₹200 billion (US$2.8 billion) and a credit guarantee fund of ₹30 billion (US$420 million).[5] The bank will initially function as a non-banking financial
company and a subsidiary of the Small Industries Development Bank of India (SIDBI). Later, it will be made into a separate company.[2] However, it will regulate Microfinance institutions.
The bank will classify its clients into three categories and the maximum allowed loan sums will be based on the category: [5]

 Shishu (शशशश): Allowed loans up to ₹50,000 (US$700)

 Kishore (शशशशश): Allowed loans up to ₹5 lakh (US$7,000)
 Tarun (शशशश): Allowed loans up to ₹10 lakh (US$14,000)
Government has decided to provide an additional fund of ₹1 trillion (US$14 billion) to the market and will be allocated as

 40% to Shishu
 35% to Kishor
 25% to Tarun
Those eligible to borrow from MUDRA bank are

 Small manufacturing unit

 Shopkeepers
 Fruit and vegetable vendors
 Artisans

Small Industries Development Bank of India (SIDBI) is a development financial institution in India, headquartered at Lucknow and having its offices all over the country. Its purpose is to
provide refinance facilities and short term lending to industries, and serves as the principal financial institution in the Micro, Small and Medium Enterprises (MSME) sector. SIDBI also
coordinates the functions of institutions engaged in similar activities. It was established on April 2, 1990, through an Act of Parliament. It is headquartered in Lucknow.[1] SIDBI operates under the
Department of Financial Services, Government of India.
SIDBI is one of the four All India Financial Institutions regulated and supervised by the Reserve Bank; other three are EXIM Bank, NABARD and NHB. They play a salutary role in the financial
markets through credit extension and refinancing operation activities and cater to the long-term financing needs of the industrial sector.[2]
SIDBI is active in the development of Micro Finance Institutions through SIDBI Foundation for Micro Credit, and assists in extending microfinance through the Micro Finance Institution (MFI)
route.[3] Its promotion & development program focuses on rural enterprises promotion and entrepreneurship development. [4][5]
In order to increase and support money supply to the MSE sector, it operates a refinance program known as Institutional Finance program. Under this program, SIDBI extends Term Loan
assistance to Banks, Small Finance Banks and Non-Banking Financial Companies. Besides the refinance operations, SIDBI also lends directly to MSMEs. [6]
State Bank of India is the largest individual shareholder of SIDBI with holding of 16.73% shares, followed by Government of India and Life Insurance Corporation of India.[7]
Non-Financial Intervention[edit]
As part of non-financial intervention in the MSME sector, SIDBI had also undertaken various measures in the past. Recently, in association with credit rating agency CRISIL and Credit
Information Company TransUnion CIBIL it has introduced "CriSidEx" and "MSME Pulse".
CriSidEx, India’s first sentiment index for micro and small enterprises (MSEs) has been developed jointly by CRISIL & SIDBI. It is a composite index based on a diffusion index of 8 parameters
and measures MSE business sentiment on a scale of 0 (extremely negative) to 200 (extremely positive). The crucial benefit of CriSidEx is that its readings will flag potential headwinds and
changes in production cycles and thus help improve market efficiencies. And by capturing the sentiment of exporters and importers, it will also offer actionable indicators on foreign trade.[8][9]
SIDBI in association with TransUnion CIBIL launched "MSME Pulse", a quarterly report on MSME credit activity, for closely tracking and monitoring the MSME segment in the country. The report
is based on a study done on over five million active MSMEs who have access to formal credit, with live credit facilities in the Indian banking system. [10]
SIDBI has launched the ‘Udyami Mitra’ Portal to improve accessibility of credit and handholding services to MSMEs. They can select and apply for preferred banks through this portal. Under the
portal entrepreneurs can apply for loan without physically visiting any bank branches and can select from over 1 lakh bank branches, track their application status and avail multiple loan benefits.
It also has facility for uploading all necessary documents. Through the portal the MSMEs can also seek handholding support for getting finance.[11][12] SIDBI has also entered into an arrangement
with CSC e-governance Services (CSCeGS) to take Udyami Mitra portal to the unserved and the underserved MSMEs. CSCeGS is a special purpose vehicle (SPV) set up by ministry of
electronics and IT ( MeitY) which acts as connect point for various digitally aligned services to villages in the country. [13]

Other activities[edit]
SIDBI has floated several other entities for related activities, including:

 SIDBI Venture Capital Limited (SVCL)[14] - for providing Venture Capital (VC) assistance to MSMEs;
 Micro Units Development & Refinance Agency (MUDRA) - for ‘funding the unfunded’ micro enterprises in the country;
 Receivable Exchange of India Ltd. (RXIL)[15] to enable faster realisation of receivables by MSMEs;
 SMERA Ratings Limited (SMERA)[14] - for credit rating of MSMEs, renamed as Acuite Ratings & Research Limited. [16];
 India SME Technology Services Ltd (ISTSL)[14] - for technology advisory and consultancy services and
 India SME Asset Reconstruction Company Ltd. (ISARC)[14] for speedier resolution of Non-Performing Assets (NPA) in the MSME sector.
SIDBI supports the Government of India in its initiatives and work as a nodal agency for some of the schemes related to development of MSMEs, such as Make in India and Startup India.