Pradhan Mantri Mudra Yojana (PMMY)

Context: Recently, the Union Cabinet has approved a scheme for interest subvention to all Shishu loan accounts under Pradhan Mantri Mudra Yojana (PMMY) to eligible borrowers.


  • The interest subvention scheme is of 2% for a period of 12 months to all the eligible borrowers under Shishu loan accounts.
  • The scheme will be extended to loans which meet the following criteria i.e. outstanding as on 31st March, 2020; and not in Non-Performing Asset (NPA) category, as per Reserve Bank of India (RBI) guidelines, on 31st March 2020 and during the period of operation of the Scheme.
  • The interest subvention would be payable for the months in which the accounts are not in NPA category including for the months that the account becomes a performing asset again, after turning NPA.
  • The estimated cost of the Scheme would be approximately Rs. 1,542 crorewhich would be provided by the Government of India.
  • The Scheme will be implemented through the Small Industries Development Bank of India (SIDBI).
  • Under PMMY, loans for income generating activities up to Rs. 50,000 are termed as Shishu loans.
  • PMMY loans are extended by Member Lending Institutions viz. Scheduled Commercial Banks, Non-Banking Finance Companies and Micro Financial Institutions, registered with Mudra Ltd.

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