The government on Wednesday decided to provide 2 percent 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 Rs 50,000 are given to beneficiaries.
The union cabinet approved the scheme for interest subvention of 2 percent 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 or micro enterprises. These loans are classified as MUDRA loans under PMMY.
These loans are given by commercial banks, RRBs, small finance banks, MFIs and NBFCs.