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written by | September 8, 2022

PMEGP Loan Apply - Scheme, Online Application Process, Subsidy, Guidelines

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The Prime Minister's Employment Generation Programme, or PMEGP, a credit-linked subsidized initiative, was launched by the Ministry of Micro, Small, and Medium Enterprises (MSME) in the year 2008. This programme encourages the creation of businesses that provide for oneself in both urban and rural settings. This loan intends to give conventional and aspiring artisans who are only employed seasonally long-term and stable work options. This plan also intends to reduce urban migration through the establishment of self-employment opportunities. The programme allows for various projects to get subsidies based on different criteria, and the rate of interest is somewhere between 11% and 12%. 

Did you know?

More than 36,000 new micro-enterprises were established with a subsidy of 1,150 crores in FY 2021–2022. 

What is PMEGP Scheme? 

The credit-linked subsidy scheme known as PMEGP, or the Prime Minister's Employment Generation Program, was initially introduced in 2008. The Pradhan Mantri's Rozgar Yojana and the Rural Employment Generation Initiative, two prior identical government programmes with related objectives and advantages, were combined to create the PMEGP. The main goal of these two programmes and the PMEGP plan is to give Indian entrepreneurs in the rural and urban areas the much-needed financial incentive they need to start their firms and businesses. 

The programme aims to support new businesses in the community and encourage employment among the youths of the nation as a consequence of these ventures. The Ministry of Micro, Small, and Medium Enterprises is in charge of managing the PMEGP, whereas the Khadi and Village Industries Committee is in charge of overseeing its countrywide implementation. District industries and banks are in charge of managing the programme at the district level. 

Also Read: What Is Collateral and How to Get a Collateral-Free Loan?

Objectives of the PMEGP Scheme 

The following are the main objectives of the PMEGP scheme: 

  • Creating jobs in India's rural and urban areas by launching a variety of new initiatives, microbusinesses, and undertakings. 
  • Giving craftsmen and dispersed groups of young people without jobs access to a single framework and supply of self-employment options. 
  • By giving them permanent forms of work within their community, to reduce the need for people in rural areas to relocate and seek economic possibilities in metropolitan regions. This helps traditional craftspeople and groups of unemployed youths who can only find seasonal jobs sporadically throughout the year. 
  • To expand the capability and chances for generating revenue for craftsmen, as well as the employment levels in both rural and urban locations. 

PMEGP Loan Eligibility Criteria 

The PMEGP programme seeks to significantly alter the nation's employment and entrepreneurial environments. Therefore, the PMEGP scheme has precise requirements for aspiring business owners or entrepreneurs who could be qualified for this financially beneficial opportunity. The PMEGP lending scheme's qualifying requirements for individuals and organisations are detailed below. 

  • The recipient must be over the age of 18. 
  • For those requesting a PMEGP loan for a manufacturing-related venture with a budget over 10 lakhs, they must have completed and passed at least Class 8. If a project's cost exceeds 5 lakh and is in the commercial or service sector, the same financing requirements apply. 
  • PMEGP financing is also available to self-help organisations. Nonetheless, this is dependent on the organization not having used any benefits from any other plan. 
  • PMEGP loans are available to societies that have been registered under the Societies Registration Act of 1860. 
  • Cooperative Associations operating in the production sector. 
  • Charitable foundations

Also Read: Learn about Short Term Loans - Short Term Loan Period, Advances & Types 

How to Apply for PMEGP Loan Online?

After confirming your eligibility and gathering all required documentation, the only step left to take to apply for a PMEGP loan is the registration procedure. The straightforward procedures you must take to submit an online PMEGP application are listed below: 

  • Start by signing in to the PMEGP program's official E-portal webpage on the KVIC portal. 
  • You will be redirected to an online application page after selecting the appropriate choice from the list on the website, whether it is for an individual or a non-individual. 
  • Complete the form with the necessary information. 
  • When finished, press the "Save Application Data" button at the page's bottom. 
  • The last step entails uploading the required files and submitting the application. 
  • All application-related information will be sent to the contact information you give. The appropriate PMEGP credit will then be handled for you. 

What Does a PMEGP Loan Offer 

The PMEGP loan is a form of term loan provided to businesses under the PMEGP plan at a fixed interest and subsidies on the total project costs. A PMEGP loan's exact terms depend on a variety of variables. The following are a few of the most significant specifics about the level of financial help a PMEGP loan provides: 

Loan Amount: 

Depending on the industry and total project budget, the Indian government grants different PMEGP loan balances. Up to 10 lakhs in PMEGP Lines of credit are available for initiatives in the commercial or service sectors. This loan's maximum amount for manufacturing-related projects is 25 lakhs. 

Self-Investment: 

The PMEGP financing programme also calls for the entrepreneur to contribute financially to the venture. This percentage is specified as 10% for the General category and as 5% for the Special category. Therefore, if your project is under the top limit, the government may approve up to 90 to 95 % of it. 

Subsidy (Rural): 

In addition to the PMEGP loan, the programme also provides a set amount of buffer money or a subsidy for your operation. This subsidy proportion for rural businesses is 25% for the General category applicants and 35% for the Special category applicants. 

Subsidy (Urban): 

The subsidy ratio for urban firms is 15% for the General category or 25% only for the Special category. Aside from these many variables, the interest rates on all PMEGP loans are typically between 11 and 12 % annually. Additionally, a PMEGP loan has a 3-to-7-year repayment schedule with a six-month deferment. According to Reserve Bank of India standards, no form of collateral is required for any PMEGP loans of up to10 lakhs. 

Also Read: Top Business Loans for Women in India - A List of Small Business Loans for Women

Conclusion:

The Government of India's flagship programme, PMEGP, has a vast area to deal with in order to provide job prospects, especially affecting the conventional ways of sustainable living. The Panchayats will be used to identify the potential recipients, and several agencies will be involved all the way down to the lowest levels of governance in order for the plan to be successfully implemented. The implementation of the PMEGP plan would guarantee that many young people who are jobless engage in productive work and guarantee demographic stabilization of the rural and urban sections of the nation. 

Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: Are there any guidelines on fund utilisation?

Ans:

At least once over the three years following the margin money's lock-in, the working capital expenditure for the PMEGP loan must be equivalent to the cash credit limit.

Q: Can I get a PMEGP loan for a fast-food restaurant?

Ans:

Yes, you may apply for a loan under the PMEGP programme to open a fast-food business. If qualified, you may also be entitled to get a 90 % PMEGP subsidy from the Indian government. Depending on the loan size, the PMEGP subsidy will vary from 15 to 35 %. 

Q: How much does the PMEGP project report cost?

Ans:

The PMEGP project report includes information on the costs and working capital needs for a season. For a maximum of three years, it covers all the renting, leasing, and other necessities' cost information. The expenditure of the PMEGP report is made up of the individual's contribution, the bank's share, and the state subsidy. The project cost is typically 10% of the project's total value for a person from the general class and 5% for a person from the special category. The price of the land is not included.

Q: What is margin money under the PMEGP scheme loan?

Ans:

When a person applies for the PMEGP scheme, they receive a predetermined sum from the Khadi and Village Industries Committee as a subsidy. It is handed over to the banking institution that has accepted to be a participant in the plan. In financial institutions, the margin capital is maintained for a lock-in term of three years.

Q: Can I get a PMEGP loan while living in an urban region?

Ans:

Yes, people who live in both urban and rural areas can apply for a PMEGP loan. The business's location does, however, affect the subsidy amount. According to the PMEGP scheme's provisions, a general category resident who resides in a city will receive a 15 % subsidy, while a resident in a rural region will receive a 25 % subsidy. The subsidies in urban areas are 25%, while in rural areas it is 35% for people from the backward sections.

Q: What is the usual processing time of the PMEGP loan?

Ans:

The candidate must go through a 16-day training session in order to submit an application for the loan. The legalities are processed when the course is over in approximately two months.

Q: How much margin money or government subsidy is applicable under the scheme?

Ans:

Depending on their eligibility and a number of other circumstances, the government subsidy differs for every candidate. The subsidy typically amounts to between 15 to 35 % of the project's overall cost.

Q: Are there any collateral requirements for the PMEGP loans?

Ans:

Under the PMEGP programme, the MSME ministry offers the applicants collateral guarantees. Furthermore, the PMEGP plan does not need collateral for undertakings with a budget of up to 10 lakhs.

Q: What is the maximum amount that one can avail of under the PMEGP loan scheme list?

Ans:

A maximum loan of 25 lakh and 10 lakhs are available under the PMEGP plan, respectively, for the establishment of manufacturing and service units.

Q: Who can apply for the PMEGP loan scheme list?

Ans:

PMEGP applicants must be at least 18 years old and have completed the 8th grade in order to apply for a loan.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.