Mudra Shishu Loan 

#GS3 #Economy 

Centre has announced 'Mudra Shishu loan' for small businesses and cottage industries so that shopkeepers do not suffer due to the COVID-19 pandemic. 

  • A 1500 crore interest subvention for small business and cottage industries has been announced under Mudra Shishu loan. 
  • The government will offer 2% interest rate subvention for a period of 12 months to prompt loan payees under the Mudra scheme. 
  • The decision is expected to bring much-needed relief to small borrowers under the Mudra Shishu loans up to ₹50,000. 

Mudra : 

  • Micro Units Development and Refinance Agency (Mudra) was started to refinance loans of up to ₹10 lakh given by banks and other lending institutions to small borrowers. 
  • Under the scheme, collateral-free loan of up to ₹10 lakh falls under three categories—Shishu, Kishore and Tarun. Loans from ₹50,001 to ₹5 lakh are disbursed under Kishore. The third category is for loans of ₹5-10 lakh. 
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