Page 20 - MUDRA ANUBHAV

business. The borrower may avail Mudra card
and withdraw the amount needed as per timely
requirement of working capital, without being

burdened with interest costs when funds are not
required. This helps in digitization of transactions
as well as convenience since the card works like a
debit card and the borrower can make payments

and withdraw cash using the card.

While traditionally the financing has happened
through Asset based collaterals, it is natural for
the financial institutions to feel vary of providing

loans to a borrower which is not capable for
providing any security. RBI has mandated the
MUDRA loans to be collateral free. While this helps
the borrower, but at the same time brings the risk

to the potential lenders. MUDRA scheme is aimed
to support beneficiary as well as financer. Through
refinancing, financial institutions are also provided
the support and encouragement.

While MUDRA loans are still provided by the financial
institutions, PMMY supports these loans by way of
providing refinance. The eligible lending institutions
may seek refinance of the funds disbursed through

MUDRA Loas. This gives necessary boost to the
small businesses and motivation to financial
institutions to support such small business. For the
economic progress of any nation and to move from

developing nation to a developed nation, robust

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