Economy

2% interest subvention on Shishu loans operationalised via SIDBI

Our Bureau New Delhi | Updated on July 14, 2020 Published on July 14, 2020

The Department of Financial Services (DFS) on Tuesday said that SIDBI will provide funds to Member Lending Institutions (MLIs) upfront under the government-approved 2 per cent interest subvention for SHISHU loans.

It may be recalled that Union Cabinet in June approved a scheme for interest subvention of 2 per cent to Shishu loan category borrowers under the Pradhan Mantri Mudra Yojana outstanding as on March 31, for a period of 12 months to eligible borrowers.

The move to allow SIDBI to provide amount to MLIs upfront would benefit 9.37 crore small loan accounts, the DFS tweeted.

This is another step towards helping small business build, the tweet added.

Mudra loans are designed to bring enterprises into the formal financial system. They are available to non-farm micro or small enterprises engaged in income generation through manufacturing, trading and services. Shishu loans are loans that are up to ₹50,000 per borrower.

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Published on July 14, 2020
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