Government’s refinancing scheme Micro Units Development and Refinance Agency (Mudra) Ltd, which was launched in April under the Pradhan Mantri Mudra Yojana with the aim of addressing funding problems of at least 57 million small business across the country, has disbursed 97.5 crore to microfinance institutions (MFIs).

So far, it has sanctioned a total of 240 crore as loan. Mudra disbursed its first loan, a sum of 35 crore, early in July to New Delhi-based microfinance lender Satin Creditcare Network Ltd. By the end of July, the disbursal figure has gone up to 97.5 crore.

The scheme, at present a division of the Small Industries Development Bank (Sidbi), provides refinancing at a relatively low 7% rate of interest, as reported earlier.

“Nine proposals have been already sanctioned and another 10 proposals are under various stages of processing," said Jiji Mammen, chief executive officer, Mudra.

According to Mammen, other MFIs that have already been sanctioned loans include Belstar Investment and Finance Pvt. Ltd, Equitas Micro Finance Pvt. Ltd, Margdarshak Financial Services Ltd, Sonata Finance Pvt. Ltd and Arohan Financial Services Pvt. Ltd.

“We have got a positive response from Mudra to which we have submitted a proposal and are in talks with," said Kartick Biswas, managing director, Uttrayan Financial Services Pvt. Ltd, an MFI with operations in West Bengal and Assam. “We expect to start receiving funds starting in September and this will ease our funding flow. We will be able to cater to more clients who are women and will increase our focus in Assam," he added.

Mudra was launched with a refinance corpus of 20,000 crore and a credit guarantee corpus of 3,000 crore to tackle the issue of lack of access to funds faced by small entrepreneurs. It will refinance financial institutions for lending to micro businesses and entrepreneurs covering loans in the range of 50,000 to 10 lakh.

This was proposed by finance minister Arun Jaitley during his budget speech. The government is hopeful that small entrepreneurs such as shopkeepers, fruit and vegetable vendors, truck and taxi operators, food service units, repair shops, machine operators, small industries, artisans, food processors and street vendors, among others, will be able to meet funding requirements through the agency.