Modified Interest Subvention Scheme

July 21, 2024

The Centre plans to increase the upper limit of the short-term crop loans under the Modified Interest Subvention Scheme (MISS) from Rs 3 lakh to Rs 5 lakh.

About Modified Interest Subvention Scheme:

It is a Central Sector Scheme, 100% funded by the Government of India.
It was launched in the year 2006-07 with a view to provide short term Agri-loans availed by farmers through Kisan Credit Card (KCC) for their working capital requirements at concessional rate of interest.
For this, at present, interest subvention is being given to concerned Financial Institutions (Scheduled Commercial Banks (SCBs)/ Small Finance Banks/ RRBs/ Cooperatives/ Computerized PACS ceded with SCBs) providing the loan.
Working of the scheme
- Farmers engaged in Agriculture and other allied activities can acquire Kisan Credit Card loans up to Rs 3 lakh at a benchmark rate of 9%.
- However, the Centre provides 2% interest subvention on the benchmark rate, bringing down the effective rate of interest to 7 per cent.
- An additional 3% concession for prompt and timely repayment further reduces it to 4% per year.
The implementing agencies for settling the claims under Interest Subvention Scheme are Reserve Bank of India (RBI)/National Bank for Agriculture and Rural development (NABARD).