On Wednesday our Prime Minister Narendra Modi has launched MUDRA Bank which will provide credit up to Rs 10 lakh to small entrepreneurs and act as a regulator for Micro-Finance Institutions'(MFIs).

“A look at the details reveals the reality that only 1.25 crore people find employment in large industries, whereas small enterprises employ 12 crore people… MUDRA scheme is aimed at funding the unfunded,” PM Narendra Modi said.

It has been set up for the development and refinancing activities relating to micro units. It will provide refinance to banks and other institutions at 7%.

“We would encourage more MFIs to be created. So the purpose of MUDRA is to create as many MFIs as possible which can actually give same kind of eco-system and services which are avail now to these poor people. It will provide much needed fund at poor people doorsteps at a reasonable rate of interest,” Financial Services Secretary Hasmukh Adhia said.