The Union Finance Minister in the Union Budget 2015-16 announced to set up a Micro Units Development Refinance Agency (MUDRA) Bank through a statutory enactment, with a corpus of ₹ 20, 000 crore, and credit guarantee corpus of ₹ 3,000 crore. MUDRA Bank will refinance Micro-Finance Institutions through a Pradhan Mantri Mudra Yojana (PMMY). In lending, priority will be given to SC/ST enterprises.

 Pending passing of legislation by Parliament, Micro Units Development Refinance Agency Ltd., which is wholly owned subsidiary of Small Industries Development Bank of India (SIDBI), has been launched on April 8, 2015 by the Prime Minister as a Non-Banking Financial Institution (NBFI). The MUDRA is intended to provide refinance support to Last Mile Financiers (LMFs) such as Non-Banking Finance Companies (NBFCs) engaged in financing micro business etc; which are in the business of lending to micro business entities engaged in manufacturing, trading and service activities. MUDRA shall be refinancing the LMFs spread across the country, which cover both urban and rural areas and extend financial assistance to self employment, micro units as per the requirements.

 MUDRA is finalizing it schemes and rate of interest. The present initiative of the Government in promoting MUDRA will help in providing self-employment and financial assistance to micro units in the country.

 This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

Refinance of last mile financiers to expand microenterprise credit and promote self employment under a national refinance scheme. The Budget proposed a statutory Micro Units Development Refinance Agency to provide refinance and a credit guarantee framework under Pradhan Mantri Mudra Yojana, prioritising SC/ST enterprises. Pending legislation, a SIDBI wholly owned subsidiary has been launched as an NBFI to refinance Last Mile Financiers, including NBFCs lending to micro manufacturing, trading and service units across urban and rural areas and to finalise schemes and rates to support self-employment.