MUDRA-Shishu loans of up to ₹50,000 to receive interest subvention of 2%


Finance minister Nirmala Sitharaman announced a 2% interest subvention for, on the loans up to ₹50,000 which are given under the MUDRA Shishu scheme.

“The total relief will be worth ₹1,500 crores,” our finance minister said.

She also added that the interest subvention will be beneficial to around 3 crore people.

This announcement was a part of the second portion of the nine measures which were announced on Thursday for the migrant workers, street vendors, small traders, and farmers as part of the ₹20 trillion packages to revive the economy.

Earlier in 2015-16, the NDA government had announced the Pradhan Mantri Mudra Yojna (PMMY) to boost entrepreneurship and promote financial inclusion by providing better credit access to small firms and new start-ups.


Initially, the MUDRA scheme was started to help the banks and other lending institutions to refinance loans of up to ₹10 lakh given to small borrowers.

Under the scheme, a borrower can get collateral-free loans of up to ₹10 lakh under three categories—

  • Shishu- it accounts for loans of up to ₹50,000
  • Kishore- it accounts for loans ₹50,001 to ₹5 lakh and
  • Tarun- it is for loans between ₹5 lakh and ₹10 lakh.

However, due to the imposition of the nationwide lockdown to contain the coronavirus, Small businesses under the MUDRA scheme have been hit severely that has impacted their capacity to pay loan installments.


Also read:-The Government has decided to raise its gross market borrowing target for the current financial year to Rs. 12 Lakh crore

Jyotika Kumari
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