PMEGP Loan Scheme; The Prime Minister’s Rozgar Yojana and the Rural Employment Generation Programme were combined to create the Prime Minister’s Employment Generation Programme, a credit-linked funding program. This program’s primary goal was to provide funding assistance to entrepreneurs starting new firms.
According to this program, the beneficiaries would get between 15% to 35% of the project cost from the government. Any recipient who is older than 18 can choose a PMEGP loan. Continue reading to learn more about this plan.
Features and Advantages of the PMEGP Program
The benefits and characteristics of a PMEGP Loan are as follows:
- This program is being carried out countrywide by the Khadi and Village Industries Commission (KVIC).
- There is no specific income criteria for an organization under this plan.
- Parties that currently receive sufficient support from the state or federal government are ineligible to participate in this program.
- Through banking institutions, State KVIC Directorates, District Industries Centers (DICs), and State Khadi and
- Village Industries Boards, the government has implemented this program at the state level (KVIBs).
- This program provides newly created or about to be established MSMEs with small business loans and other forms of financial assistance.
- The scheme’s per-person investment cannot be more than Rs. 1.5 lakhs in plain areas and Rs. 1 lakh in hilly areas.
- According to this plan, financial institutions may also offer financing in the form of a composite loan that includes both working capital and capital expenditures.
- In the service sector, the maximum project cost is capped at Rs. 10 lakhs, whereas in the manufacturing sector, it is capped at Rs. 25 lakhs.
- Under this plan, financial institutions offer term loans or working capital loans as credit facilities for covering capital expenditures.
- The PMEGP system states that the credit value falls between 60% and 75% of the total project cost after the subsidy and owner contribution are subtracted.
- The PMEGP loan payback period lasts between three and seven years.
- Working capital must be used in a way that it can reach the full cash credit ceiling and not fall below 75% of the
- sanctioned amount before the lock-in period of three years has passed.
- A beneficiary is not required to provide any collateral under this arrangement. The beneficiary may, however, be required to provide their property as security if the project costs surpass Rs. 10 lakh, depending on the lender’s requirements.
- Consider the requirements for applying for a PMEGP loan after learning about the PMEGP Scheme’s characteristics and advantages.
PMEGP Loan Qualifications
The following requirements must be satisfied in order to be eligible for a PMEGP loan:
- Candidates must be older than 18 years old.
- If a beneficiary wants to use the PMEGP loan to build a service unit that costs more than Rs. 5 lakh and a manufacturing unit that costs more than Rs. 10 lakh, they must have completed class eight.
- Cooperative societies involved in the creation of self-help organizations may also choose PMEGP loans. The group must first confirm that they are not receiving any benefits from any other programs.
- Societies that are registered under the Societies Registration Act of 1860 are eligible to apply for PMEGP loans.
- You should think about the qualifying requirements before learning about the paperwork needed to apply for this loan.
Application Materials for a PMEGP Loan
The list of paperwork needed to apply for a PMEGP loan is as follows:
- an application form with a photo in passport size
- ID Verification (includes PAN card, Aadhaar card, passport)
- The Address Is (includes utilities bill, Aadhaar card)
- Passing certificate for Class VIII Project Report
- Caste Certificate for Minorities, Ex-Servicemen, PHC, OBC, and SC
- If available, a certificate of technical and academic coursework
- Entrepreneurship Development Certificate (EDP)
Now that you are familiar with the benefits, requirements, and paperwork needed to apply for a PMEGP loan, take a look at the straightforward steps to do so.
How to Make a PMEGP Loan Application?
The following stages provide a breakdown of how to apply for a PMEGP loan:
Step 1: Visit the PMEGP Scheme’s official website on the KVIC website.
Step 2: Enter your login information
Step 3: Choose the appropriate choice, either person or non-individual, from the page.
Step 4: Following this, you’ll find an online application form.
Step 5: Complete the application form with the necessary information.
Step 6: Following completion, click the “Save Applicant Data” link at the bottom of the page.
Step 7: The last step is to upload the required documents and click “Submit.”
You will receive all application-related information on your registered mobile number and email address once you have successfully completed all these procedures. An application for a PMEGP loan will thereafter be handled.
You now have a thorough understanding of PMEGP loans, its characteristics and advantages, and the application process. To ensure a smooth application process, carefully review the eligibility requirements before utilizing this credit facility and acquire the required paperwork.