Terms of Reference(TOR)
Study on impact of Pradhan Mantri Mudra Yojna (PMMY)
1. Project Title
Study on impact of Pradhan Mantri Mudra Yojna (PMMY) - Role and Impact of PMMY.
2. Background
As per NSSO survey (2013), there were 5.77 crore small/ micro units in the country,
mostly individual proprietorship / ‘Own Account Enterprises’ which employ around 12
crore people. Over 60% of these units are owned by persons belonging to weaker
sections of the society, the scheduled castes, scheduled tribes, Other Backward
Classes, minorities and women. Majority of these units do not have access to the
formal banking system and are forced to borrow from informal sources, or use their
limited own funds. Micro Units Development & Refinance Agency Limited (MUDRA)
was incorporated under the companies Act, 2013 and launched on April 08, 2015 by
the Hon’ble Prime Minister as a wholly owned subsidiary company of SIDBI, with NBFI
registration from RBI.
MUDRA has been working towards bridging this gap. By creating a good architecture
of Last Mile Credit Delivery, MUDRA aims to increase the confidence of the aspiring
but unemployed youth of the country to become first generation entrepreneur as also
of existing small businesses to expand their activities.
The present authorised capital of MUDRA is at ` 5000 crore with a paid up capital of
`1675.93 crore. SIDBI has contributed the entire capital of MUDRA. RBI has
allocated an amount of `20,000 crore from Priority Sector shortfall of Commercial
Banks for creating a Refinance Corpus Fund, as announced by the Hon’ble Finance
Minister.
Pradhan Mantri Mudra Yojana (PMMY), a scheme to finance income generating
small business enterprises was also launched on 08 April 2015, along with the launch
of MUDRA, wherein all banks are required to finance micro entrepreneurs engaged in
microenterprises of income generating activities with loan requirement up to `10
lakh, irrespective of whether they avail of refinance support from MUDRA. However,
MUDRA credit guarantee support is available to all eligible institutions under the
Yojana. All MUDRA loans issued on or after 8 April 2015 are eligible to be covered
under the CGFMU, notified on 18 April 2016.
Lending under MUDRA loans focuses on the unfunded segments of the Micro
Enterprises by granting the loans in the following 3 segments so that they can
significantly contribute to the nations GDP:
Loans upto `50,000 (Shishu)
Loans above `50,001/- and upto `5 lakh (Kishore)
Loans above `5,00,001/-and upto `10 lakh (Tarun)
The above 3 categories of MUDRA loans are based on the business life-cycle that the
loanee enterprise currently is in. These three categories signify the growth,
development and funding needs of the beneficiaries.
The business domain of MUDRA consists of income generating micro enterprises
engaged in manufacturing, trading and services sectors for loans up to `10 lakh.
From fiscal 2016–17 micro enterprises involved in activities allied to agriculture too
have also been brought within the ambit of PMMY loans. The overdraft amount of
`5,000 sanctioned under PMJDY is also treated as part of MUDRA loans under PMMY.
MUDRA supplements the efforts of the existing institutions by providing
funding support through refinance and securitization of loan assets, to extend
financial assistance to borrowers from micro enterprises.
Commercial Banks, Regional Rural Banks (RRBs), Cooperative Banks, NBFCs
and MFIs engaged in financing micro enterprises are eligible for refinance support
from MUDRA.
Securitization - MUDRA as a market maker
Securitization, a scheme which not only allows MUDRA to leverage its capital, but
also enables reasonably quality small and medium sized originators such as NBFCs
and MFIs to access capital markets at affordable rates.
MUDRA Guarantee Fund
As a measure to mitigate the problem of collateral security faced by the new
entrepreneurs, GOI has notified the constitution of Credit Guarantee Fund for Micro
Units (CGFMU) on 18 April, 2016 with `3000 crore which is operational through
NCGTC.
The progress under Refinance support provided by MUDRA during past 3 years is as
under:
Assistance from MUDRA
(` in crore)
Agency 2015-16 2016-17 2017-2018
Amount Amount Amount Amount Amount Amount
sanctioned disbursed sanctioned disbursed sanctioned disbursed
Banks 2432 1886.73 1886.73 4,655.73 4,405.73
2432
MFIs 812 616 820 787 446.5 369.5
NBFCs 0 0 399 399 1,137.00 1,005.00
RRBs 239.25 239.25 181.79 181.79 516.75 516.75
SFBs - - - - 500 500
Total 3483.25 3287.25 3287.52 3254.52 7,255.98 6,796.98
Investme
49.95 49.95 271.42 271.42 721.92 704.07
nt in PTCs
Grand
3533.2 3337.2 3558.94 3525.94 7,977.90 7,501.05
Total
Pradhan Mantri Mudra Yojana (PMMY)—also known as the Mudra loan scheme—not
only intends to bridge the funding gap to the micro enterprises but also aims to boost
the confidence of the first generation entrepreneurs and assist existing small
businesses expand their activities. Own account enterprises (OAEs) including
proprietorship and partnership firms engaged in small manufacturing units, service
sector enterprises, shop keeping, fruits and vegetable vending, trucking, operating
food services, repairing and maintenance, operating machines, running small
industries, food processing, handicraft making (artisans) among others in both rural
and urban areas are potential Mudra borrowers under PMMY.
To facilitate hassle free and flexible working capital assistance to the borrowers,
MUDRA introduced the MUDRA card—a debit card on RuPay platform which can be
operated across the ATMs and ‘Point of Sale’ (POS) Machines. A Borrower would be
able to manage his credit needs by drawing funds from ATMs or make payments
through POS machines, based on the requirement and repay s and when funds are
available with him. Many partner banks / MFIs disbursed working capital loans by
adopting the MUDRA card scheme.
The lending terms of PMMY, such as, margin, interest rate and security, etc. are as
per the RBI stipulations. In terms of RBI guidelines issued on lending to Micro, Small
& Medium Enterprises (MSME) Sector, banks are mandated not to collect collateral
security in the case of loans up to Rs.10 lakh extended to units in the MSE sector.
Banks are required to encourage their branch level functionaries to avail of the Credit
Guarantee Scheme cover, where ever felt desirable.
Department of Financial Services (DFS), GoI has set up ‘Mission Mudra’ to closely
monitor the programme. Periodic video conferencing by DFS officials with banks has
helped in timely implementation and monitoring of the programme.
While the progress of PMMY is being monitored by MUDRA, the NABARD supporting it
by following up with RRBs. Monitoring of MFI progress is being supported by MFIN in
respect of NBFC-MFIs—a segment that played a major role in dispensing micro loans
and Sa-Dhan in respect of non-NBFC-MFIs.
The progress under PMMY during past 3 years is as under :
Pradhan Mantri Mudra Yojna (PMMY)
Scheme 2015-16 2016-17 2017-18
No. of Amount Amount No. of Amount Amount No. of Amount Amount
Accounts sanctioned disbursed Accounts sanctioned disbursed Accounts sanctioned disbursed
(lakh) (` in crore) (` in crore) (lakh) (` in crore) (` in crore) (lakh) (` in crore) (` in crore)
SHISHU 324.01 62894.96 62027.69 364.98 85100.74 83891.88 426.69 106001.60 104228.05
KISHORE 20.69 43052.55 41073.28 26.64 53545.14 51063.12 46.53 86732.16 83197.05
TARUN 4.10 31501.76 29853.76 5.40 41882.66 40357.13 8.06 60943.34 59012.25
TOTAL 348.80 137449.27 132954.73 397.02 180528.54 175312.13 481.28 253677.1 246437.35
Monitoring of PMMY
For effective monitoring of PMMY, a dedicated portal linked to MUDRA website
www.mudra.org.in was commissioned for capturing weekly data on the performance
of various institutions under PMMY. Provision has been made to capture district level
disaggregated data giving details of loan and borrower wise categories. The portal
captures data on women beneficiaries, SC/ST/OBC/Minority/New
Entrepreneurs/accounts etc. under PMMY. Portal has been fine tuned to capture NPA
data also from partner institutions. The data is used for analysis and monitoring the
progress under PMMY, both at State and Central Government level. An NPA module
has also been launched to capture NPA position under PMMY portfolio. Similarly, a
module for online boarding of success stories of PMMY is also being made available in
the portal.
It is now proposed to carry out a longitudinal impact assessment of PMMY covering
base line, mid line and end line studies. An independent agency is to be appointed to
evaluate the impact generated by the PMMY Scheme with a view to make the
scheme more effective and in line with the demand.
3. Overall Objective
In the context of different product designs and delivery mechanisms in
different parts of the country, it is proposed to engage a suitably qualified firm to
carry out a longitudinal impact assessment of PMMY i.e., resultant change
associated with the involvement in PMMY, covering base line, mid line and end line
studies. The mid line and end line studies will be comparing the findings of the End
line Survey with those of the base line and mid line study. Apart from studying the
Impact of PMMY on the sector, the study would also look at whether MFIs were able
to raise additional debt funds for on-lending to the ultimate beneficiaries and
whether MUDRA has been able to provide low cost funds to MFIs and NBFCs,
changes in the social and economic profiles, and the sociopolitical impact of the
PMMY on the micro entrepreneurs / Micro units.
The study would have objectives, as mentioned below.
(a) Document Impact of PMMY at the end user level, dealing with issues of
attribution as objectively as possible;
(b) Improve practice by understanding the process of PMMY intervention and
their impact at the end user level.
(c) Understanding the role of alternate channels such as MFIs and other
intermediary organisations in reaching out to end-users by leveraging
additional funds
The key research tools are as under :
Data Collection Tool – Both quantitative (questionnaire based survey) and
qualitative (focus group discussions, case studies, semi-structure interviews) tools
to be used for collecting data/feedback from the end user as well as intermediary
channel.
These could be used to understand the process and role of intermediary channel
in reaching out to end users.
Unit of analysis - The micro unit / borrower under PMMY (as also non-client micro
unit) to be considered as the unit for analysis. Further, for the purpose of
intermediary channel, individual lending institution shall be considered as a unit
for analysis.
Comparison group - Survey of a quasi-experimental design with micro units from
the same area with a view to compare clients with different types of service (e.g
with or without a MUDRA card) to track the effectiveness of the services. The
bidders may suggest the qualitative options they would explore in this regard.
Statistical testing – Independent means and chi-square tests to be calculated on
comparative data assessing statistical significance of differences between clients
and non-clients as well as between base line and mid line / end line data for
clients.
4. Scope of the Work
The selected agency will, as a part of the exercise, address a set of core
questions:
Outreach and access:
The agency should assess the impact of PMMY on the outreach and
access for the micro entrepreneurs , whether PMMY has made outreach
and access to debt for micro entrepreneurs easy.
Difficulties (type / length of information sought, non cooperative
behavior of loan officers, delaying / denying loans etc.) being faced by
the borrowers in accessing loans under PMMY geography and lending
institution wise (most easy / difficult to access).
Difficulties being faced by the lenders in granting loans under PMMY
geography and lending institution wise.
Types of micro enterprises covered under Shishu, Kishore and Tarun
activity / livelihood pattern wise.
Any adverse selection made by the lenders.
Interest rates being charged under 3 products of PMMY by lenders
institution wise.
Social profiles of clientele: Whether there has been any improvement in
the profiles of the ultimate beneficiaries (SC/ST/Women/NER beneficiaries)
under the 3 products of PMMY.
educational background of borrowers under the 3 products of PMMY.
Social background of borrowers
New financial intermediaries: The Agency shall assess whether the
assistance from MUDRA has helped in supporting micro entrepreneurs
under PMMY by the new financial intermediaries such as Small finance
Banks / wholesale institutions and NBFCs.
Economic Impact: The agency will assess any change in the Income
growth of the ultimate beneficiaries (i.e. micro entrepreneurs particularly
SC/ST/Women/NER beneficiaries) due to the PMMY. Any changes in the
business in terms of increase in turnover of the enterprise, income,
employment etc., any improvement in the Assets of the beneficiaries,
recovery of assets hypothecated or mortgaged, saving pattern, changes in
number of sources of income, etc. Loan utilisation pattern over time (debt
repayment, growth of business, investments. Any improvement in terms of
education and health related expenditures. Providing/improvement in
credit plus services to the micro entrepreneur.
How is the pre and post-credit employment pattern.
use of credit for acquisition of assets/working capital/repayment of
other loans or anything else.
Ratio of women headed enterprises and their performance.
Social and political Impacts: Involvement of women entrepreneurs in new
or non-traditional activities, confidence and assertiveness by the micro
entrepreneurs, in particular, role of women entrepreneur in household
and community decision-making.
Pressure on banking institutions to improve services
Future Relevance & Prospects: Suggest the extent of future need and
relevance of the PMMY for the Micro enterprise sector for the next five
years.
Major risks being faced by the micro entrepreneurs
5. Expected Deliverables
The selected agency shall be responsible for:
a) Submission of evaluation report for each of the base line, mid line and
end line studies: base line within 6 months of award of the contract,
mid line within 36 months of award of the contract, and end line within
66 months of award of the contract.
b) Sampling: The survey would consist of sample of about 25 lending institutions
covered under PMMY representing stratified random sample, covering about
1,00,000 PMMY borrowers (or statistically significant sample whichever is
higher) from various Regions/States, type of intermediary, type of loan spread
across various geographical areas and 3 products of PMMY with different legal
status.
c) The consultant shall submit 5 hard copies and 10 CDs of the each of the final
report for the 3 lines of study.
6. Competency and Expertise Requirements
A. Pre Selection Criteria: The documents submitted by the applicants must give
proof of their financial resources and general professional expertise, their
experience, sectorial knowledge of micro enterprise sector and regional
knowledge; they must also provide evidence of an adequate personnel
structure. The documents should outline, briefly and concisely, the relevant
work performed over the last ten years and summarize the applicant‟s
qualifications and experience. A legally binding signed declaration of
undertaking from the applicants pursuant to Appendix 1 shall be included with
these documents.
B. The selected agency will have
a) comprehensive knowledge of micro enterprise sector policy and practice
b) Comprehensive knowledge of best practices in impact assessment methodologies
for microfinance / micro enterprises and in other areas of economic and social
development or market research.
c) Experience of designing and conducting impact assessments or market research
using both quantitative and qualitative methodologies with both PAPI and CAPI
methods.
d) an excellent record in socio-economic research in India
e) A demonstrated ability to undertake research on a national basis, to manage a
range of sub-contractors and forge effective partnerships at national level.
f) The following key professionals shall invariably be part of the team till
completion of the project.
SI No. Academic / Professional Experience
qualification
1 Not less than 5 years in
consultancy in economics and
At least one Postgraduate finance and statistical models for
in Economics / Statistics banks and financial /
/Applied Economics Institutions.
2 At least one Not less than 5 years in
C.A./M.B.A/PGDBM consultancy / developing
business strategies for banks
and financial institutions.
7. Methodology
The study shall be carried out through Field Research (interaction with lending
institutions, PMMY borrowers, Government departments and other stake holders)
(pick representative sample based on agreed parameters), etc. and scrutiny of
latest available published and unpublished information, discussions with
knowledgeable persons in the industry, stakeholders, lenders, etc.
8. Duration
The duration of the assignment will not be more than 66 months from the date of
contract award. Extension not exceeding 6 months without any cost escalation, if
required, in the period of contract shall be considered based on achievements
made vis-a-vis the deliverables.
9. Reporting Requirements
The agency/consultant team will report to The Managing Director & CEO,
MUDRA on all matters.
Reports on the progress made will be submitted on a monthly basis by 10th
of next Month.
Discussion on the progress on a fortnightly basis will be held through video-
conferencing / telecom where presentation will be made by the
agency/consultancy team to MUDRA. The members of team of the
consulting firm would be required to make necessary trips to Head Office of
MUDRA at Mumbai for discussions, as and when called.
Draft of Final Report for base line study will be submitted to SIDBI after 10
months of the contract.
Draft of Final Report for mid line study will be submitted to SIDBI after 36
months of the contract.
Draft of Final Report for end line study will be submitted to SIDBI after 66
months of the contract.
The final report should be submitted after incorporating the comments of
MUDRA/stakeholders.
Final report for each line of study with comments/suggestions received
from stakeholders / MUDRA will need to be submitted by within one month
from the receipt of all comments.
Timeframe: The consultancy will be for a period of 66 months.
Sr. No. Milestones X days of signing of contract
1 Inception Report 15 days
2 Data collection (field visit/ 51/2 months
Interview etc.)
3 Submission of Draft Report 6 months
One month after receipt of
4 Submission of Final Report comments i.e. 7 months
10. EOI Assessment Criteria
For the purposes of shortlisting, the assessment criteria are enclosed along with
Request for Expression of Interest (REOI).
Sr Criteria Max Sub criteria Marks
no marks
1 Evidence of 40 Experience in handling 15
experience of similar similar projects.
projects / sector
Experience of banking and 10
financial services sector
Experience of micro finance 15
/ micro enterprise sector
2. Expertise for this 60 Assessment of available 20
particular project technical knowledge specific
to this project
Assessment of the personnel 15
structure in regard to the
tasks expected
Assessment of the key 15
personnel in permanent
employment and always
available to monitor the
team and provide back-up
services from the home
office
Understanding of the TOR 10
and suggested methodology
by the applicant
11. Expression of Interest
Based on the TOR, interested consultants may forward an Expression of Interest
(EOI) to MUDRA. The EOIs should be duly supported by:
a. submission of brochures
b. Consultancy firm‟s
i. experience in having conducted various studies/surveys on Indian
economy and in particular banking sector
ii. Experience in having published documents/publications on banks and
banking sector including on microfinance / micro enterprise sector.
iii. experience in having worked for at least 5 years in actively doing
research and publishing such reports on banks and banking sector
including micro finance / micro enterprise sector at national /
international level
iv. key personnel and their academic and professional qualifications
v. experience of key personnel in dealing with banks and financial
institutions including micro finance / micro enterprise sector matters
and
vi. turnover and net profit for the last 3 financial years of the firm
submitting the EOI.
Documents to be submitted:-
Corporate profile and status, evidence of financial resources in relation to the volume of
services required (inter alia confirmation of guarantee line given by company’s principal
bank; legally binding signed declaration of undertaking from the applicant in compliance
with the attached sample [Appendix 1 to this Annex]). Other evidence required will
depend on the amount of services to be performed (e.g. balance sheets and profit and
loss accounts for the last three years), relevant references from the last ten years to
prove technical qualifications and experience abroad, in the region or country (maximum
ten references per sector of operation), curricula vitae of consultant’s key personnel who
will provide monitoring and back-up services from the home office, statement of
personnel structure (number and qualifications), declaration of intent regarding
cooperation (name of lead company), declaration on associated firms, if appropriate
further documents to be submitted.
Based on the EOI, MUDRA shall evaluate the consultancy firms and shortlist the
consultants for submission of detailed Technical and Financial Proposals based on an
evaluation of which and subsequent negotiations, the contract shall be awarded. It is to
be noted that Consulting Firms that are acting as general advisers to MUDRA may not
take part, even if their activities are not directly related to the Financial Cooperation
Project. Consultants may associate with other firms in the form of a joint venture or a
sub-consultancy to enhance their qualifications.
Interested consultants may obtain further information at the address below during office
hours (10.00 AM to 5 PM, Monday to Friday, excluding public holidays). The response to
this REOI is to be submitted in Original + Four copies. Expressions of Interest must be
delivered in a written form to the address below in sealed covers super-scribed with
“Expression of Interest for Study on impact of PMMY– Role and Impact of PMMY” by
August 13, 2018 (1700 hrs)”.
Managing Director & CEO
Micro Units Development & Refinance Agency Ltd (MUDRA)
MSME Development Centre, Plot No. C-11, 'G' Block,
Bandra Kurla Complex, Bandra (East),
Mumbai - 400051
Maharashtra
Phone- 022-67221506/ 022-67531231
E-mail: ceo@mudra.org.in
Website: www.mudra.org.in
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