Eligibility for PMEGP New Enterprises (Units):

• Any individual above 18 years of age
• There will be no income ceiling for assistance for setting up projects under PMEGP.
• For setting up projects costing above Rs. 10 lakhs in the Manufacturing sector and above Rs. 5 lakhs in the Service/Business sector, the beneficiaries should possess at least VIII standard pass educational qualification.
• Assistance under the scheme is available only for new viable projects sanctioned specifically under the PMEGP.
• Existing Units and the units that have already availed any Government Subsidy (under PMRY, REGP, PMEGP, CMEGP, or any other scheme of Government of India or State Government) are not eligible.
• Projects without Capital Expenditure (Term Loan) are not eligible.
• Cost of Land cannot be covered under the project cost.
• All Implementing Agencies (KVIC, KVIB, DIC, and Coir Board) can process applications in both rural as well as urban areas.
• Applicants should possess a valid Aadhaar Number.
• Applicants shall give their consent to authenticate demographic details such as Aadhaar number, Name, Gender, Date of Birth, and Mobile number from UIDAI server.

Documentation:

Scanned Documents (Upto 1 MB) required for online application are:

• Passport Size Photo
• Highest Educational Qualification
• Project Report Summary/Detailed Project Report
• Social/ Special Category Certificate, if applicable
• Rural area certificate if applicable

Objectives of the PMEGP Loan Scheme:

• To create jobs in India’s urban and rural areas by launching new self-employment programs, micro-enterprises, and ventures.
• To support self-employment options for widely scattered traditional artisans/ unemployed rural and urban youth to the greatest extent possible.
• To create long-term and consistent employment for rural and unemployed young persons, halting their migration to cities.
• Increasing artisans’ earning potential and accelerating rural and urban employment growth.

Benefits of PMEGP

The benefits of PMEGP are as follows:

• It provides low-interest loans and subsidies to set up new micro-enterprises in the non-farm sector for rural and urban areas.
• It encourages financial institutions to increase credit flow to the micro sector and reduces dependency on money lenders.
• It provides employment opportunities to traditional artisans and unemployed youth to reduce migration rates from rural to urban areas.
• It increases the employment and entrepreneurship characteristics of the regions and of the nation.

PMEGP Loan Details

The PMEGP scheme provides financial assistance to micro-enterprises with a project cost ranging from Rs. 9.5 lakh to Rs. 50 lakh. The scheme caps the maximum project cost for the manufacturing sector at Rs. 50 lakh. It caps the cost at Rs. 20 lakh for the business/service sector. The beneficiary makes a 5 to 10% contribution, and the bank sanctions the remaining 90 to 95%.
In reality, your bank credit will only cover 60% to 75% of the project’s cost. The PMEGP scheme covers the remaining 15% to 30%, and the bank will finance capital expenditure in the form of Term Loan and working capital in the form of cash credit or in the form of a composite loan consisting of capital expenditure and working capital.

Key Features of PMEGP Loans

• Banks sanction funding up to 95% of the project cost.
• On this, the government provides 15% to 30% as margin money or PMEGP subsidy.
• The bank provides the remaining 60% to 75% as a Term Loan and working capital in the form of cash credit or in the form of a composite loan consisting of capital expenditure and working capital.
• Interest rates are regular, from 11% to 12%.
• Repayment tenure is 3 to 7 years after a preliminary moratorium.

Who Can Apply for a PMEGP Loan?

Here is the list of persons who can apply for funding for new projects under the PMEGP scheme:

• Any individual who is above 18 years of age
• The person should have passed at least the 8th standard for a manufacturing sector project costing above Rs. 10 lakhs.
• The person should have passed at least the 8th standard for a business/service sector project costing above Rs. 5 lakhs.
• Self-help groups (even those falling below the poverty line provided that the SHG has not obtained benefits from another scheme).
• Institutions registered under the Societies Registration Act, 1860.
• Production co-operative societies.
• Charitable trusts.

Financial assistance under PMEGP scheme

The Government of India offers financial assistance under the PMEGP scheme to promote self-employment and generate income opportunities for the unemployed and underemployed population. The scheme provides a subsidy on the project cost, calculated as a percentage of the margin money. This subsidy ranges from 15% to 35%, depending on the beneficiary’s category and location. The remaining project cost is financed by the bank as a Term Loan. Additionally, the scheme provides training and guidance to entrepreneurs to help them successfully manage their enterprises.