Sun. Jun 23rd, 2024
PMEGP Loan

The Prime Minister’s Job Generation Programme (PMEGP) is a credit-linked subsidy programme introduced by the Ministry of Micro, Small, and Medium-Sized Enterprises (MSME) to provide rural and urban employment possibilities. The Government of India grants subsidies of up to 35% of the total project cost through the PMEGP plan. The maximum project cost covered is 10 lakh rupees for service units and 25 lakh rupees for manufacturing units.

The PMEGP has four distinct goals:

To create employment in rural and urban areas of India through the establishment of new micro-enterprises or projects.

To provide a common ground for rural and urban unemployed youngsters and widely scattered traditional artisans to join together and generate self-employment opportunities.

To discourage rural residents from migrating to urban areas in search of employment by providing them with secure, long-term employment. This pertains specifically to traditional and aspiring craftspeople, as well as rural and urban youngsters who obtain seasonal or traditional employment but remain unemployed for the remainder of the year.

Increase the income-earning ability of craftsmen and concentrate on accelerating rural and urban employment growth.

Recent Update under PMEGP Scheme

Submit an application for a Second Loan of up to Rs. 1 Crore under PMEGP.

Applicants can also apply for a 2nd PMEGP Loan for the upgradation as well as an extension of current PMEGP/REGP/MUDRA units. Under the PMEGP scheme, applicants are also eligible for a 15 to 20 percent Government Subsidy on their second loan.

Financial Assistance under PMEGP Scheme

The programme provides financial help to individuals depending on various criteria, due to the fact that the programme targets micro, small, and medium-sized enterprises (MSMEs), there are restrictions on the number of eligible projects and the loan amount.

The amount of the borrower’s payment is 10% for the General category and 5% for the special categories, which include SC/ST/OBC, minorities, women, ex-defence employees, physically challenged persons, and those from the North East region, hills, and borders, among others.

The rate of subsidy for the General category will be 15 percent in urban areas and 25 percent in rural areas. The government subsidy for the Special categories of persons will be 25 percent in urban regions and 35 percent in rural areas.

Now let us look at some FAQs.

What is the maximum allowable project cost under PMEGP?

Ans. A project’s maximum credit ceiling is Rupees twenty-five lakh in case of a manufacturing unit and Rs. 10 lakh in case of a service unit.

Q. Is collateral necessary for a PMEGP loan?

Ans. No, collateral is not required for PMEGP projects with a maximum cost of Rs. 10 lakh. Under the PMEGP scheme, the CGTMSE provides a collateral guarantee for projects exceeding Rs. 5 lakh and up to Rs. 25 lakh.

Which companies fall under PMEGP?

Ans. To view the comprehensive list of firms participating in PMEGP, please visit the URL provided below. https://www.kviconline.gov.in/pmegp/pmegpweb/docs/jsp/newprojectReports.jsp

What is a PMEGP subvention?

The Prime Minister Employment Generation Programme (PMEGP) Subsidy is a credit-linked subsidy granted by the Government of India in which the beneficiary might receive a 15 to 35 percent subsidy on the overall cost of the project. This subsidy is primarily accessible to individuals and SMBs across the nation.

How much Margin is Money (Government Subsidy) permitted under the PMEGP loan?

Ans. The margin money is equivalent to the government subsidy, which ranges from 15% to 35% of the overall project cost.

Who are the beneficiaries of the PMEGP programme?

Ans. The following entities are the beneficiaries of the PMEGP programme:

Support Groups (SHGs)

Donative Trusts

Production Co-operative Societies incorporated under the Societies Registration Act of 1860

Can a 28-year-old with a 10th grade education apply for a PMEGP Loan?

Ans. Yes, individuals who are at least 18 years old and have completed the eighth grade can apply for loans under the PMEGP programme. There are no higher age limits; however, banks may impose their own upper age limits based on their own criteria.

How long does the PMEGP loan application process take?

Ans. After the completion of the 16-day training session, obtaining a loan from a bank under the PMEGP typically takes about two months.

Can a PMEGP loan be obtained for a fast food restaurant?

Ans. Yes, you are eligible for a PMEGP loan to open a fast-food business. If eligible, you can also take advantage of the Government of India’s PMEGP subsidy of 90 percent of the entire project cost. The PMEGP subsidy will range between 15% and 35%, depending on the loan amount.

Are there any educational requirements for receiving a PMEGP loan?

Ans. If the beneficiary wishes to build a manufacturing unit costing more than ten lakh rupees or a service unit costing over Rs. 5 lakh with a PMEGP loan, they must have completed and passed Class 8.

A person who resides in an urban area may qualify for a PMEGP loan.

Ans. Yes, this loan programme is available to all qualified candidates, regardless of where they reside. However, there are limitations on how much assistance one can receive. In metropolitan regions, the subsidy for the general category is 15 percent, whereas, in rural areas, it is 25 percent. It is 25% in urban regions and 35% in rural areas for the most vulnerable members of society.

What is margin money in the context of a PMEGP loan? How does it assist me?

Ans. The subsidy you receive from the Khadi and Village Industries Commission is referred to as margin money (KVIC). It is the amount the government will contribute to your firm as part of the PMEGP loan. This margin money is provided to the bank and is subject to a three-year lock-in period.

Will the bank provide me with the margin funds?

Ans. Yes, the bank gives you the margin money after the lock-in period if you have used your funds in accordance with the bank’s requirements.

By Manali