India launches new loan initiative for small businesses

World Today

India has finally decided to include its small and unorganized sector into it’s formal economy. Under a new scheme called MUDRA, Indian government will now give loans to small businesses that had little or no access to formal financial institutions. CCTV’s America’s Shweta Bajaj filed this report from new Delhi.

India launches new loan initiative for small businesses

India launches new loan initiative for small businesses

India has finally decided to include its small and unorganized sector into it's formal economy. Under a new scheme called MUDRA, Indian government will now give loans to small businesses that had little or no access to formal financial institutions.CCTV's America's Shweta Bajaj filed this report from new Delhi.

Highlights:

  • Small businesses in India employ a massive 120 million workers, but almost all function outside India’s formal economy.
  • The Indian government has launched Micro Units Development Refinance Agency or MUDRA to help these small businesses.
  • Traditionally banks do not give small and unorganized businesses loans because of lack of paperwork like residence proof, since most of them are from villages and the banks doubt their ability to pay