Performance Evaluation of Mudra Bank (With Special Reference to State of Madhya Pradesh)

Abstract

he theme of ‘United Nations International MSME day’ reads “Small Businesses, Big Impact.” All over the world, MSMEs have been recognized as growth engines of economic development. In India too, MSMEs have been instrumental in shaping the growth trajectory of the economy. But these small businesses face many problems since their inception to their day to day operations. Major problem of small business in India is lack of finance. Given this fact, there was an urgent need of an institution which would provide affordable loans to micro and small businesses engaged in manufacturing, trading, and service activities. Micro unit’s development and refinance agency (MUDRA) Bank is established with an aim to provide affordable loans and nurture the entrepreneurial talents in the micro and small business sector. The bank with various ambitious objectives is a fully owned subsidiary of SIDBI which is a principal financial institution for promotion and growth of Micro, Small and Medium Enterprises (MSMEs) in the country. The bank aims to provide financial support to entrepreneurs in three categories namely Shishu, Kishor and Tarun. This paper attempts to study the inception of MUDRA Bank and evaluate its performance in India and the state of Madhya Pradesh.

Keywords: MSMEs, Small Businesses, MUDRA Bank, United Nations, Economic Development

JEL Classification: E, G, M, O