<P> The formation of the agency was initially announced in the 2015 Union budget of India in February 2015 . It was formally launched on 8 April. For non-retail businesses, the MUDRA scheme under SIDBI offers loans to SMEs and MSMEs but banks authorized to approve loans through the scheme mostly downplay any such requests . </P> <P> The MUDRA banks were set up under the Pradhan Mantri MUDRA Yojana scheme . It will provide its services to small entrepreneurs outside the service area of regular banks, by using last mile agents . About 5.77 crore (57.7 million) small business have been identified as target clients using the NSSO survey of 2013 . Only 4% of these businesses get finance from regular banks . The bank will also ensure that its clients do not fall into indebtedness and will lend responsibly . </P> <P> The bank will have an initial capital of ₹ 200 billion (US $3.1 billion) and a credit guarantee fund of ₹ 30 billion (US $470 million). The bank will initially function as a non-banking financial company and a subsidiary of the Small Industries Development Bank of India (SIDBI). Later, it will be made into a separate company . However, it will not regulate Micro Finance institutions . </P> <P> The bank will classify its clients into three categories and the maximum allowed loan sums will be based on the category: </P>

The size of credit guarantee fund in mudra