What is MUDRA and why MUDRA has been set up?

What is MUDRA? MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., is a financial institution set up by the Government of India for the development and refinancing of micro units' enterprises. It was announced by the Hon'ble Finance Minister while presenting the Union Budget for Financial Year 2016. Why MUDRA has been set up? The purpose of MUDRA is to provide funding to the non-corporate small business sector through various Last Mile Financial Institutions like Banks, NBFCs and MFIs. The biggest bottleneck to the growth of entrepreneurship in the Non-Corporate Small Business Sector (NCSBS) is the lack of financial support to this sector. More than 90% of this sector does not have access to formal sources of finance. Government of India is setting up MUDRA Bank through a statutory enactment for catering to the needs of the NCSBS segment or the informal sector for bringing them into the mainstream.