DAY-NULM: How Banks Handled the Interest Subsidy, and Where to Borrow Now

Can you still get a bank loan under DAY-NULM?

No. The Deendayal Antyodaya Yojana - National Urban Livelihoods Mission (DAY-NULM) concluded on 30 September 2024, and no bank accepts a fresh Self Employment Programme (SEP) loan application under it today. This bank guide therefore has limited scope: there is no live lender comparison to make. What follows explains how banks treated the DAY-NULM subsidy while it ran, why the choice of lender mattered less than for a normal loan, and which open scheme to borrow under now. For the full history, eligibility and closure details, see the Deendayal Antyodaya Yojana - National Urban Livelihoods Mission pillar.

Honest note: because the mission is closed, this "bank-specific" article cannot rank current interest rates by lender. It is kept as a short, accurate record and a redirect, not padded to look like a live shopping guide.

Why the choice of bank mattered less under SEP

Under DAY-NULM's Self Employment Programme, the borrower's cost was fixed by the mission, not set by the bank. The borrower always paid 7% per year, and the Urban Local Body (ULB) reimbursed the bank the difference between 7% and the bank's own prevailing lending rate. So two applicants at two different banks paid the same 7% out of pocket, regardless of each bank's base rate. The bank absorbed no loss, because NULM topped it up.

This is the reverse of an ordinary loan, where you shop lenders for the lowest rate. Under SEP the effective rate to the borrower was capped, so the things that actually differed between banks were:

• Speed of sanction after the ULB sponsored the case.
• Willingness to lend without collateral, which the RBI already mandates for micro and small enterprise loans up to Rs 10 lakh (circular dated 6 May 2010).
• Discipline in filing subvention claims with the ULB, since the subsidy was paid only against timely repayment certified by the bank.

Which lenders participated

Per the SEP guidelines on nulm.gov.in, the interest subvention could be claimed by any lender on the Core Banking Solution platform:

• Scheduled commercial banks, public and private sector.
• Regional rural banks (RRBs).
• Cooperative banks; state and district central cooperative banks.

Women's self help groups repaying on time received an additional 3% interest subvention on top of the standard subsidy, routed through the same bank linkage. That extra 3% was a feature of the scheme, not a rate any single bank offered on its own.

What to ask if you have a legacy DAY-NULM loan

If you hold a SEP or SHG bank-linkage loan sanctioned before 30 September 2024, the subsidy mechanism still governs that account until it closes. Take these questions to your lending branch:

1. Has every quarter's interest subvention been credited against my loan account, and up to which quarter?
2. Is my repayment being certified as timely so the ULB releases the next subsidy tranche?
3. For a women's SHG, has the additional 3% subvention been applied?
4. What is my outstanding balance net of subsidy already received?

If the branch and the ULB disagree on subsidy credited, escalate to the City Mission Management Unit at your ULB and then the State Urban Livelihoods Mission, as the pillar's help section sets out.

Where to borrow now instead

Because DAY-NULM is closed, a new borrower should look at live schemes:

• Street vendors should use PM SVANidhi, where lending runs until 31 March 2030. Your DAY-NULM Certificate of Vending or vendor ID card remains valid proof of vending for a PM SVANidhi application at pmsvanidhi.mohua.gov.in.
• Micro-enterprise loan seekers can look at PM MUDRA Yojana (Shishu, Kishore, Tarun) through the same categories of banks, or check whether the successor urban poverty pilot has reached your city.

Compare those live schemes lender by lender the normal way — base rate, processing fee, turnaround, because unlike DAY-NULM's fixed 7%, their effective cost genuinely varies by bank.