PMEGP Loan Scheme

The Prime Minister's Employment Generation Programme (PMEGP) is a Government of India-backed credit-linked subsidy scheme. In this scheme, the eligible beneficiaries can receive a subsidy ranging from 15% to 35% of the project cost as help from the government.

This Government of India-backed scheme comes with an initiative to foster entrepreneurship, promote economic development, and create employment opportunities by offering financial help, training, and support to individuals. If you are keen on establishing or expanding your own micro-enterprises, this scheme can help you.

Read through to know ways you can apply for PMEGP loan online and other major details about this scheme that you should know.

What is PMEGP Scheme?

The Prime Minister's Employment Generation Programme (PMEGP) is managed by the Khadi and Village Industries Commission (KVIC) at the national level. The scheme is carried out in each state through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs), and banks. KVIC channels government subsidies through selected banks, which are then given directly to the beneficiaries or entrepreneurs into their bank accounts.

PMEGP Loan Interest Rates

The PMEGP scheme offers financial help with varying interest rates for beneficiaries seeking to establish or expand their micro-enterprises. To know the latest highlights on the PMEGP interest rates, please refer to the table below:

Objectives of PMEGP Scheme

These objectives collectively aim to ease unemployment challenges, foster entrepreneurship, and encompass various purposes under the PMEGP Scheme:

• Generating Sustainable Employment:This scheme ensures continuous and sustainable job opportunities in both rural and urban areas across the country. It ensures offering employment to traditional artisans and unemployed youth by establishing micro-enterprises.
• Empowering Traditional and Prospective Artisans:Provides traditional and prospective artisans opportunities by enabling rural and urban unemployed youth to achieve self-employment by providing continuous and sustainable job opportunities through the PMEGP Scheme
• Creates Credit Flow to the Micro Sector:Encourage the participation of financial institutions by subsidizing interest rates on micro-loans. The scheme also facilitates higher credit flow to the micro-sector, allowing easier access to funding for setting up small businesses under PMEGP.
• Livelihoods and Local Economies:The PMEGP Scheme strengthens rural and urban livelihoods by promoting the establishment of micro-enterprises. Use locally relevant skills to set up businesses, ‌enhancing the local economy.
• Community Development and Self-Employment:Fosters community development by promoting self-employment opportunities.Encourage the growth of local economies by empowering individuals to start their own micro-enterprises.

Subsidy & Funding Under PMEGP Scheme

The subsidy percentage varies depending on the category and location of the project. The remaining project cost after deducting the subsidy is covered through a bank loan. Here the table provides you an overview of the subsidy & funding under the PMEGP scheme:

PMEGP Loan Limit

The table summarizes the PMEGP Loan scheme, includes the maximum project cost. Loan limits, beneficiary contributions, bank sanctioned percentages covered by the PMEGP scheme.

PMEGP Loan Eligibility Criteria

Here is the table that summarizes PMEGP loan eligibility criteria are under the guidelines of the scheme and may be subject to specific conditions and changes as per the scheme's regulations.

Document Required for PMEGP Loan

The documents for PMEGP loan may vary based on the specific policies of the lending institution or bank. Applicants are advised to confirm the exact documentation needed with the respective bank or financial institution before applying for the PMEGP loan.

• Duly filled application form with passport-sized photographs
• Project report detailing the proposed business/project
• Applicant’s Identity & Address Proofs (Valid identification and address proofs)
• Applicant’s PAN card, Aadhaar card & VIII Pass certificate
• Special category certificate, if applicable
• Certificate of Entrepreneur Development Programme (EDP) training completion
• Certificate for SC/ST/OBC/Minority/Ex-Servicemen/PHC, as relevant
• Certificate of academic and technical courses, if completed
• Any other document required by the Bank or NBFC (as specified by the lending institution)

PMEGP Bank List

Here, the list of availability of the scheme through specific banks may vary based on location and time. It's advisable to contact the Khadi and Village Industries Commission (KVIC) or relevant authorities for the most recent and comprehensive list of banks taking part in the PMEGP scheme in your area.

• State Bank of India (SBI)
• Punjab National Bank (PNB)
• Bank of Baroda (BOB)
• Canara Bank
• Union Bank of India
• Indian Bank
• Bank of Maharashtra
• Central Bank of India
• HDFC Bank
• ICICI Bank

Benefits of PMEGP Loan

The PMEGP (Prime Minister's Employment Generation Programme) loan offers a spectrum of advantages aimed at fostering entrepreneurship and self-sustainability among individuals. Here's an introductory overview highlighting its benefits:

• Low-interest loans and subsidies: PMEGP offers financial support as low-interest loans and subsidies aimed at establishing new micro-enterprises in the non-farm sector across rural and urban areas.
• Encourages credit flow: This initiative encourages financial institutions to enhance credit flow into the micro-sector, reducing dependency on informal money lenders, and ‌promoting financial inclusion.
• Generates employment: PMEGP creates employment opportunities, particularly benefiting traditional artisans and unemployed youth, aiming to mitigate migration rates from rural to urban areas.
• Boosts employment and entrepreneurship: The program contributes to enhancing employment and fostering entrepreneurship both at the regional and national levels.
• Fair eligibility criteria: The eligibility criteria for accessing subsidies provide an equal and fair chance for all, ensuring a more inclusive approach to participation. -
• Coverage across most industries: PMEGP encompasses an array of industries, except those listed in the negative industries list, thus offering support to a broad spectrum of business endeavors.

Sectors That Can Avail PMEGP Loan

Individuals above 18 years old qualify for PMEGP loans. For projects exceeding Rs.10 lakh in manufacturing or Rs.5 lakh in the service sector, at least an eighth-grade education is required. Only new projects are eligible for approval under the PMEGP.

Whereas, Self-help groups, institutions registered under the Societies Registration Act, of 1860, production co-operative societies, and charitable trusts are eligible for PMEGP, provided they haven't received benefits from other schemes. However, existing units under different government schemes or those already availing of government subsidies are not eligible for PMEGP loan.

List of Business Types Not Allowed in PMEGP Scheme

There are certain business categories that are restricted from receiving support under the PMEGP (Prime Minister's Employment Generation Programme) Scheme. These restrictions encompass enterprises engaged in specific activities that contravene program guidelines or pose risks to health, the environment, or social well-being.

• Farming - Businesses involving gardening, flower cultivation, fish and pig farming, as well as the use of specialized farming machinery, are not permitted. This is to encourage a diversified focus on various businesses beyond conventional farming practices.
• Plastic and Environment: Making bags from recycled plastic that are used for food and other things is not allowed. This is because these things are bad for the environment, and the program wants to protect nature.
• Traditional Activities: Some traditional things are also not allowed. Making things from special wool and certain types of weaving are on the list. These things are part of another program called the Khadi Program, which has different rules.
• Meat-Related Business: Businesses involving meat products or items harmful to health are restricted. This includes the manufacturing or sale of addictive substances such as specific types of cigarettes, alcohol, or liquor. Producing tobacco or selling toddy is prohibited under the scheme. The program aims to discourage enterprises associated with health risks or addictive substances.
• Transport in Villages: While transportation-related businesses in villages are ‌restricted, exceptions exist in regions like Andaman & Nicobar Islands and Jammu & Kashmir, allowing specific transportation services like auto-rickshaws and tourist boats in those areas.

Steps to Apply for PMEGP Loan

The process of applying for a PMEGP online (Prime Minister's Employment Generation Programme) loan involves several streamlined steps that aspiring entrepreneurs or individuals need to follow.

Here are the easy 4steps that you need to follow:

• Step 1: Access the official PMEGP website via the Khadi and Village Industries Commission portal -https://www.kviconline.gov.in/pmegpeportal/jsp/pmegponline.jsp
• Step 2: Fill out the online PMEGP application form following the provided guidelines, entering all necessary details accurately.
• Step 3: Save the applicant's data by clicking on the ‘Save Applicant Data’ button after entering all the required information.
• Step 4: Upload all necessary documents for the final submission of the application form.
• Step 5: Upon successful submission, an applicant’s ID number and password will be sent to the registered mobile number provided during the application process.