In order to further provide interest relief of 2 per cent per annum to MSMEs, government has extended the validity of the Interest Subvention Scheme for MSMEs till March 31, 2021. The government had announced the scheme on November 2, 2018, to offer interest relief on loans to the extent of Rs 1 crore and implemented for FY19 and FY20 and now up to FY21. this scheme was provides interest subvention to support small businesses who have been affected due to COVID-19 pandemic. This Scheme is for implementation of one of the measures relating to MSMEs, announced under the Atma Nirbhar Bharat Abhiyan. The Scheme will be implemented through the Small Industries Development Bank of India (SIDBI) and will be in operation for 12 months.


  • An interest subvention of 2% for a period of 12 months, to all Shishu loan accounts under PMMY to all eligible borrowers.
  • For borrowers, who have been allowed a moratorium by their respective lenders, as permitted by RBI under the ‘COVID 19 Regulatory Package.


  • Loans 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 scheme will incentivize people who will make regular repayments of loans.

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