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Abstract

Micro Units Development and Refinance Agent (MUDRA) is a finance institution, launched by the Government of India in 2015 as an initiative to finance the micro, small and medium enterprises (MSME), and entrepreneurs across the country who does not have access to the formal banking system. In order to address this problem to the micro and small-scale enterprises, MUDRA loan yojana was started by Government of India in 2015 to provide loan up-to ten lakh rupees to the nonagricultural and non- corporate firms. The concept was to “fund the unfunded”, who instead of being job seekers would be job providers. There are three types of loans under this scheme – Shishu, Kishore and Tarun, depending on the size of the loans. This paper tried to look into the sole purpose of “funding the unfunded”, the need to understand how the money has been utilised and to what extent this has contributed to improving macroeconomic outcomes as GDP, GNP, unemployment etc. Data sources in the study have been mainly secondary in nature and available in the government websites (Mudra, RBI, MSMEs), reports, journals, magazines and newspapers. The sources reported number of accounts opened, loan amount sanctioned and disbursed since the year of inception till 2019-20. From some sources data such as number of loans sanctioned and disbursed per account opened pan India has been extracted that is categorised under Shishu, Kishore and Tarun loan accounts. This paper offers an insight to the impact MUDRA scheme had on the people at the bottom of the pyramid through our analysis for the period of 2015-16, the year of inception of the scheme and until 2019-20 as well as aims to focus on the amount of loans sanctioned and disbursed during the period of study and to find out if there has been any growth in loan sanctioned and disbursed on yearly basis. Analysis has been made on accounts opened by women entrepreneur, new entrepreneur and minorities, for each category of the scheme and yearly growth percentage during the period of study has been extracted. The advantages and threats that mudra loan may pose on the Indian economy in the near future has been studied along-with the suggestions required for this scheme.

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