What Is PMEGP Loan Scheme - By Egniol

What Is PMEGP Loan Scheme?

PMEGP Loan Scheme

Prime Minister’s Employment Generation Programme (PMEGP Loan Scheme) was launched in the year 2008, for the purpose of generating employment in rural as well as urban areas. It was created by merging two different schemes of the government, i.e., Prime Minister’s Rojgar Yojana (PMRY) & Rural Employment Generation Programme (REGP).

The PMEGP loan scheme was launched to overcome several problems, and one of the reasons is upliftment of the economy, where people not only generate employment for themselves, but also for the unemployed population of the country. Secondly, it is meant to promote the traditional artisans, so that they have a way to continuous and stable income and also create employment opportunities for the unemployed youth.

The PMEGP loan scheme is implemented at the national level by the Khadi and Village Industries Commission (KVIC), which serves as the nodal body. The scheme is implemented at the state level through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs), and banks. KVIC routes the government subsidies under the scheme through the designated banks for final disbursement to the beneficiaries/entrepreneurs into their bank accounts. And we at Egniol help you understand the working and eligibility, and help you in acquiring subsidy under this PMEGP scheme.

What are the main features of the PMEGP Loan Scheme?

The PMEGP loan scheme is based on the supply of subsidies to launch a microenterprise in order to make the project feasible through the extension of credit in the form of a PMEGP loan. The various features that distinguish this critical undertaking are as follows:

Objectives: The fundamental goal of PMEGP KVIC is to unite its four components, which include the following.

  • To create jobs in both rural and urban regions by assisting in the establishment of new micro-enterprise initiatives.
  • By bringing together the country’s many artisans and unemployed kids in a collaborative effort to create self-employment opportunities.
  • Prevent rural youth migration to metropolitan centres in search of long-term work by promoting traditional vocations all year.
  • To supplement traditional craftspeople’ incomes in rural areas by giving opportunities for self-employment.

Loan Quantity: The PMEGP rules, which fall under the overarching MSME formula, impose quantity constraints in the following form:

  • Maximum manufacturer: Rs.25 lakhs
  • Maximum amount for services: Rs.10 lakhs.
  • Self-Investment: This is decided by the location of the business.
  • Plains: Rs.1 lakh maximum.
  • Hills: Rs.1.5 lakhs maximum.

PMEGP Loan Interest Rate: The bank’s standard interest rate for MSME firms is 11 percent to 12 percent per annum. The relevant interest rate, however, is a concessional 4 percent under the ISEC (Interest Subsidy Eligibility Certification) Scheme for a mix of Working and Fixed Capital expenses. The KVIC makes up the difference with the standard interest rate under the budget heading “Grants.” This facility is only available to Khadi and Polyvastra production members.

How does the PMEGP Loan scheme work?

What Is PMEGP Loan Scheme - By Egniol

PMEGP like most of the other schemes has a designed and set layout of providing you with subsidies for your business. You can avail subsidies starting from 15% that can go up to 35%.

The criteria of how the subsidies are disbursed are divided into two categories, and they are :-

Rural: If your business is located in a rural area, and you belong under general category then you can avail subsidy on your business loan of about 25%, and if fall under SC/ST/Minority/Women entrepreneur and are located in a village then your subsidy can go up to 35%.

Urban: This scheme is also valid in cities, so if you are running a business in city and also looking for subsidies, then you can avail 15% subsidy on your business loan if you belong to the general category, however, if you fall under SC/ST/Minority/Women then your subsidy can go up to 25%.

This is how the Ministry of MSME is authorised to distribute the subsidies, to help the growing and new businesses by the Government of India.

Who can Apply?

What Is PMEGP Loan Scheme 2022 - By Egniol

Before applying for the PMEGP loan scheme facility, let’s look at who qualifies under the PMEGP Scheme guidelines.

1. Applicants must be over the age of 18.

2. Candidates must have completed the eighth grade.

3. Self-help organisations that are ineligible for any other social welfare programme.

4. Trusts established for charitable causes

5. Societies established under the Societies Registration Act of 1860

6. Manufacturing is carried out through cooperative societies.

7. Lending facilities are only available to new firms. PMEGP Loan Scheme List 2022 PDF

How can you Apply?

The State/Divisional Directors of KVIC, in consultation with KVIB and the respective state’s Director of Industries (for DICs), will issue local advertisements in print and electronic media inviting applications and project proposals from prospective beneficiaries interested in establishing enterprises/starting service units under PMEGP loan scheme.

How Egniol can help you?

At Egniol (The best startup consultants in India) we help with developing the required document, confirm the eligibility criteria, apply for the PMEGP loan scheme and are here to help you out in every step of the way and once that is done, we can further help in building an online presence by creating your very own website along with creating your handle for different social media platforms through web development and digital marketing. Following that, we also help you look up and avail funding through different government schemes, like Stand-up India, SISFS, etc. 

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