A Mudra card is a debit card that is issued to a Mudra loan borrower against their loan account. This card is used to make withdrawals from the working capital portion of the sanctioned amount. A Mudra card also allows the borrower to make frequent credits into their loan account to reduce the interest burden by directly paying the principal component of the loan.
There are various non-credit challenges or constraints that the NBFCs face, which includes knowledge gaps, skill development gaps, information asymmetry, business or financial illiteracy, and lack of growth orientation. In the future, MUDRA intends to implement a credit-plus approach and provide Developmental and Support services to the target demographic in order to address these limitations. It will play the role of a market maker and create an ecosystem with the capacity to provide value in an effective and long-lasting way.