PMEGP Loan: Apply for PM Employment Generation Programme

What is PMEGP loan?

Prime Minister’s Employment Generation Programme is a loan based subsidized programme established in 2008. This scheme can be considered as a merger of the older employment opportunity generation schemes of Prime Minister’s Rozgar Yojana (PMRY) and Rural Employment Generation Programme (REGP).

The merger of the schemes resulted in setting up of micro enterprises which has increased the employment opportunities in India. PMEGP scheme is established and controlled by the Ministry of Micro, Small and Medium Enterprises (MoMSME). It is implemented by the Khadi and Village Industries Commission (KVIC).

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​PMEGP loan: Apply for PM Employment Generation Programme

Objectives of PMEGP loan scheme

•  To continuously generate sustainable employment opportunities across the Nation.
• To provide sustainable employment opportunities for traditional artisans.
• To facilitate Banks and Financial Institutions fund micro-enterprises in rural areas.
•  To encourage rural based entrepreneurs.

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Scope of PMEGP loan

The PMEGP loan scheme offers subsidized loans to aspiring entrepreneurs, depending on their project and location. Loans of up to Rs 25 Lakhs can be issued for manufacturers. For enterprises in the services sector, maximum loan amount of Rs 10 Lakhs may be sanctioned. Under PMEGP loan scheme, the applicant has to invest about 5-10% of the project cost, the Central Government would provide subsidy of up to 35% depending on the project, while the banks would fund the remaining cost as a term loan. SC/ST applicants are given relaxation on self contribution.

PMEGP Loan Eligibility

• The applicant must be at least 18 years of age.
• The applicant should have a minimum education of Class VIII.
• Only new projects are eligible.
•  Enterprises that have availed benefits under any other Government scheme are not eligible.
• Self help and charitable trusts are also eligible to get benefits under the scheme.
•  Societies registered under Societies Registration Act, 1860
• Production based co-operative industries are also eligible.

See Also: Public Sector Banks in India

Black listed enterprises under PMEGP loan

• Enterprises related to meat processing and sale.
• Enterprises related to intoxicants like cigarettes and tobacco.
• Manufacturing of polythene covers of less than 20 microns.
• Enterprises related to Pashmina wool.

PMEGP Loan Allocation Details

Following are the features of the loans allotted under PMEGP loan scheme:

• PMEGP Loan Margin: The loan margin largely depends on the type of enterprise. Loan margin also depends on the category of the applicants; SC/ST applicants get relaxations on the margin.
• PMEGP Loan Interest Rate: The interest levied on loans under PMEGP scheme would be 11-13% a year, which is similar to Micro and Small industries.
• PMEGP Loan Tenure: Each bank has a different repayment tenure. In general, the repayment of loans availed under this scheme is 3-7 years.
• Margin Money: Margin Money is deposited in a savings bank account linked to the loan account, with a lock-in period of 3 years. This amount is then adjusted with the loan amount or released as per the applicant’s wishes.
• Working Capital: This is necessary to have operating expenditure that is equal to the cash credit limit when the margin money is locked in, at least 75% of the sanctioned amount must mandatorily be used.

PMEGP loan documents required

• Detailed project report.
• Caste certificate, this is because certain categories have relaxation in loan margin.
• Documents required for claiming the subsidy.
• Cost break-up sheet, which includes capital requirements and working capital requirements.
• Legal documents of the property in which the enterprise is going to be setup.
• Other general documents like PAN, ID and Address Proof.

How to apply for PMEGP loan scheme?

The state/divisional directors of KVIC would advertise locally though the print and electronic media, inviting applications from prospective entrepreneurs to apply under the scheme. The applicants must apply for project proposal with estimated cost and other relevant documents. The applicants can fill online application form at https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp, take the printout and submit the same with detailed project report and other relevant documents to their respective offices.

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