New Delhi [India], November 18 (ANI/ATK): The PMEGP Scheme is a financial scheme that stands for ‘Prime Ministers Employment Generation Programme.’
This scheme provides financial support to the MSMEs to expand, or stabilize their existing business. This loan is also given to individuals to start a new business.
Financial support is very helpful while starting your new business or managing your existing business. It is also required during the growth phase of your business.
For MSMEs and new businesses, it can get very difficult to get a loan. To counter this problem, theGovernment of India started the PMEGP scheme in 2008.
PMEGP Scheme’s Loan Structure
PMEGP loan has a limit that can be sanctioned for different businesses. For example, businesses in the manufacturing sector can have a maximum project amount of Rs25 lakhs. However, the limit is Rs10 lakhs for businesses in the service sector. The business makes a 5% to 10 % contribution of the project amount, and the bank provides the rest as a term loan.
However, in reality, you only get 60% to 75% from the bank, and the rest of 15% to 35% you will receive in the form of margin money through the PMEGP scheme. The margin money, in simple words, is a subsidy that the government provides.
How to geta loan under the PMEGP scheme
The PMEGP scheme is managed by the Khadi and Village Industries Commission (KVIC).
To get the benefits of this scheme, you have to fill up the application, where you have to provide necessary details regarding the nature of the business, the detail of the project, etc. Also, you have to submit the necessary documents.
And to get your loan successfully sanctioned, your application for your project or business must satisfy any one of the four objectives of the PMEGP scheme.
The four objectives for the PMEGP scheme are –
To create employment opportunities in both the rural and the urban areas of India by establishing new businesses, startups, self-employment projects, or through the growth of established businesses.
To create self-employment opportunities among the youth in rural and urban India.It can also be to promote and support the traditional craftsmanship and artisans in India.
To create stable employment for the youth in rural India so they don’t migrate to urban cities in search of employability.
To increase the income of the traditional artisans of rural and urban India by promoting and providing self-employment to them.
Documents Required to apply for PMEGP Loan
The documents required to apply in the PMEGP scheme are –
Aadhar card
PAN card
Project report to declare the project details.
Caste certificate or any other Special category certificate (if needed)
Rural Area certificate
Letter from the authority
Educational Qualification certificate or Skill Development Training certificate or EDP certificate.
Collateral of PMEGP scheme loan
As per the RBI guidelines, any project costs up to Rs10 lakhs does not require any collateral to get a loan. But if the project cost is more than Rs10 lakhs, you may need to provide some collateral according to the needs of the lender. It is because the process for loans for the projects above Rs10lakhs are different.
Interest Rate for PMEGP Loan
The interest rate for a PMEGP loan is 11% to 12% p.a.
Eligibility for the PMEGP Scheme
The eligibility criteria for applying to the PMEGP loan are –
Any individual applying for a PMEGP loan has to be above 18 years of age.
The individual must have passed the 8th Standard in school for the manufacturing sector project that costs above Rs10 lakh
service sector project that costs aboveRs5 lakh.
Self-help groups are eligible.
Charitable trusts.
Registered Societies.
Co-operative societies that are involved in the business of production.
Businesses that are under the PMEGP Scheme are:
Agriculture & Food Processing
Forest-Based Products
Hand Made Paper and Fibre
Mineral Products
Polymer and Chemical Products
Rural Engineering and Bio-Tech
Service and Textile
How businesses can apply for a PMEGP loan online
Visit the website of the Khadi and Village Industries Commission (KVIC) (kviconline.gov.in).
Next, click on the Online Application form for Individual or Online Application form for Non-Individual (whichever is suitable for you).
Next, fill-up the form by entering the necessary details.
Now click on ‘save application data’
Then upload the documents and get ready for the final submission.
After the final submission, you will get an application ID and password, it will be sent to your registered mobile number.
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