Cabinet approves 2% interest subvention for Shishu-Mudra loans

News: Government has approved a 2% interest subsidy for Shishu loan account holders under the Pradhan Mantri Mudra Yojana(PMMY) for a period of 12 months to eligible borrowers.


  • Pradhan Mantri MUDRA Yojana(PMMY): It was launched by the Prime Minister in 2015.
  • Aim: To provide loans up to 10 lakh to the non-corporate, non-farm small/micro enterprises.
  • Lending Institutions: Commercial Banks, RRBs, Small Finance Banks, MFIs and NBFCs.
  • Categories of Loans: MUDRA has created three products as per the stage of growth and funding needs of the beneficiary micro unit:
    • Shishu: Covering loans up to Rs. 50,000.
    • Kishore: Covering loans above Rs. 50,000 and up to Rs. 5 lakh
    • Tarun: Covering loans above Rs. 5 lakh and up to Rs. 10 lakh.

Additional Facts:

  • Udyami Mitra Portal: It was launched by Small Industries Development Bank of India (SIDBI) to improve accessibility of credit and handholding services to MSMEs.
  • Udyam Sakhi: It is an initiative of the Ministry of Micro,Small & Medium Enterprises (MSME) to encourage women entrepreneurs by creating business models revolving around low-cost products and services to empower women and make them self-reliant and self-sufficient.