The government on Wednesday decided to provide 2% interest subvention to borrowers under the ‘Shishu’ category of the flagship Pradhan Mantri MUDRA Yojana (PMMY).
Under the Shishu category, collateral free loans of up to ₹50,000 are given to beneficiaries.
The Union Cabinet approved the scheme for interest subvention of 2% to Shishu loan category borrowers under PMMY, outstanding as on March 31, 2020, for a period of 12 months to eligible borrowers, Information and Broadcasting Minister Prakash Javadekar said.
The PMMY was launched by Prime Minister Narendra Modi on April 8, 2015 for providing loans up to ₹10 lakh to non-corporate, non-farm small/micro enterprises. Under Shishu category, loans upto ₹50,000 can be availed.
These loans are classified as MUDRA loans under PMMY. These loans are given by commercial banks, RRBs, small finance banks, MFIs and NBFCs.