How Does MUDRA Work?
MUDRA (Micro Units Development and Refinance Agency) doesn’t directly hand out loans. It acts as a financial bridge between small businesses and banks. MUDRA provides funds to institutions like banks and microfinance institutions. These institutions then use that money to offer MUDRA loans to micro and small businesses. So, MUDRA acts like a booster shot for lenders, encouraging them to participate in financing smaller businesses that might not qualify for traditional bank loans. This system helps funnel money directly into the hands of small entrepreneurs and self-employed individuals, fueling their growth and development.