The Modified Interest Subvention Scheme (MISS) is a Central Sector Scheme of the Government of India, fully funded by the Centre, designed to provide concessional short-term credit to farmers. It originated from the Interest Subvention Scheme (ISS), which was launched in the 2006-07 fiscal year to ensure farmers received short-term credit at a 7% interest rate, thereby solving the problem of high-interest informal loans and promoting institutional credit.
The scheme works by providing an interest subsidy to lending institutions, which include Public Sector Banks, Regional Rural Banks (RRBs), Cooperative Banks, and Private Sector Banks operating in rural and semi-urban areas. For the financial years 2022-23 to 2024-25, the government provides an interest subvention of 1.5% per annum to these institutions on short-term agricultural loans up to ₹3 lakh. This support enables banks to offer the loan to farmers at a subsidized rate of 7% per annum.
A key provision is the Prompt Repayment Incentive (PRI), which offers an additional interest subvention of 3% to farmers who repay their loan on time, typically within one year of disbursement. This incentive effectively reduces the interest rate for prompt-paying farmers to 4% per annum. The scheme is implemented and monitored by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD).
MISS is closely connected to the Kisan Credit Card (KCC) scheme, which provides the mechanism for farmers to access this revolving credit. The scheme's coverage has been extended beyond crop loans to include working capital for allied activities like animal husbandry and fisheries, with a separate interest benefit applicable up to ₹2 lakh for loans exclusively for these sectors. Recently, the Union Cabinet approved the continuation of MISS for the financial year 2025-26 with the existing 1.5% subvention rate. Furthermore, the Union Budget 2025-26 introduced an enhancement of the short-term crop loan limit under MISS from ₹3 lakh to ₹5 lakh.