Government Announces 2% Interest Subvention on Mudra Shishu Loan
Last Updated : May 15, 2020, 1:05 p.m.
During the Lockdown there are many corporate and non-corporate industries that are in losses. There are also some industries that have taken MUDRA loan under the Pradhan Mantri MUDRA Yojna but they are unable to pay the EMIs back. Under the Pradhan Mantri Mudra Yojna, there are three loan schemes and that are Tarun, Kishore, and Shishu. So the government of India has announced Interest Subvention of 2% on MUDRA Shishu loans for the time period of 12 months. The Mudra Shishu Cover is mostly given to the non-corporate, non-farm small and micro-enterprises. Let’s see the details of this facility provided by the government.
Announcement Made by the Government
- People who have taken the Mudra Shishu Loan for up to ₹50000 will get an interest subvention of 2% from the government.
- The rebate in the rate of interest will be for a period of 12 months.
- The total amount of relief on the Mudra Shishu Loan after reducing the interest will be of ₹1500 Crores.
- The Current Portfolio of the Mudra Shishu Loan is 1.62 Lacs Crore.
- As per the analysis 3 crores, people will be benefited from this interest subvention.
Benefits of this Facility
- Now the borrowers will have to pay a reduced amount of EMI on the loan.
- It will increase the productivity of the business because the borrowers can invest the saved funds into their businesses.
- Now the Businesses can bring their activities back on track after the lockdown.
- Job opportunities will also be created in micro and small enterprises.
What is Mudra Scheme?
In the Pradhan Mantri Mudra Yojna, you can take a loan for your business starting from ₹50000 to ₹10 Lacs. This scheme is divided into three different schemes known as Shishu, Kishore, and Tarun. All these schemes have a different amount for the loan disbursal. You can take a look at the loan amount given under these schemes.
- Shishu Loan- Maximum Loan of up to ₹50000.
- Kishore Loan- Minimum Loan Amount of ₹50000 with a maximum of ₹5 Lacs.
- Minimum Loan Amount of ₹5 Lacs with a maximum of ₹10 Lacs.
Who all are Eligible for this Loan?
Any Indian Citizen who is willing to start a new business can request the government for the Mudra Loan. Then, it is totally up to the government whether it grants you the Mudra loan or not depending upon the business idea, your financial status, and many other things.
Banks that Provides Mudra Loan
- All the Nationalized Bank in India have the authority to grant Mudra Loans.
- Private Banks like Axis Bank, HDFC Bank, ICICI Bank, Citi Union Bank, DCB Bank, Federal Bank, Indusind Bank, Jammu and Kashmir Bank, Karnataka Bank, Karur Vysya Bank, Kotak Mahindra Bank, Nainital Bank, South Indian Bank, Yes Bank, and IDFC Bank have the power to give Mudra Loans.
- Rural Banks
- Corporative Banks
- Non-Banking Financial Companies and Micro Finance Companies.
Conclusion
There are various micro and small businesses under the Mudra Loan Scheme that are highly affected due to the lockdown. Therefore the government has announced a relief on interest by 2% subventions on the Shishu Mudra Loan. It enables businesses to continue their activities and increase the capacity of the business to repay the loan. The subvention on the rate of interest will be provided for only 12 months. So, now it is time to bring your business back on track.