The Prime Minister's Employment Generation Programme (PMEGP) credit-linked subsidy scheme

The Prime Minister's Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme that helps generate employment opportunities in rural and urban areas. The scheme was introduced in 2008 by merging the PMRY and REGP programs. 

The PMEGP loan is part of the Prime Minister's Employment Generation Programme (PMEGP), a scheme aimed at promoting self-employment and generating employment opportunities through the establishment of micro-enterprises. Under PMEGP, individuals and groups are provided with credit-linked financial assistance to set up new ventures in both rural and urban areas.

How PMEGP Loan Works:

Loan Amount:

• The loan amount depends on the project cost, which can vary depending on the type of enterprise being set up:
  • For manufacturing units, the project cost can be up to Rs. 25 lakh.
  • For service sector units, the project cost can be up to Rs. 10 lakh
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    Subsidy and Loan Split:

    • The government provides a subsidy to help reduce the cost of the loan. The remaining portion is covered by a loan from a financial institution, such as a bank.
    • The subsidy is typically in the range of 15% to 35%, depending on factors such as:
    • Location: Rural areas receive a higher subsidy compared to urban areas.
    • Category: Special categories like women, SC/ST, OBC, minorities, and differently-abled persons are eligible for higher subsidies.
      
      
      

    Subsidy Details:

    • General Category: 15% subsidy in urban areas and 25% in rural areas.
    • Special Categories (SC/ST, women, OBC, etc.): 25% subsidy in urban areas and 35% in rural areas.
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    Loan Repayment:

    • The loan repayment period is typically between 3 to 7 years, with a moratorium period (grace period) of 6 months to 1 year after the first loan disbursement.
    • The rate of interest on the loan is relatively low compared to regular loans.
      
      
      

    Eligibility for Loan:

    • Age: Applicants must be at least 18 years old.
    • Category: Individuals, self-help groups (SHGs), cooperatives, and institutions can apply. There are special incentives for women, SC/ST, OBC, and differently-abled persons.
    • Other Criteria: The applicant should have the ability to repay the loan and demonstrate a viable business plan. The scheme is intended for the establishment of micro-enterprises in areas like manufacturing, services, and trade.
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      Application Process:

      • The loan application process involves submitting a business plan to the Khadi and Village Industries Commission (KVIC) or the District Industries Centre (DIC).
      • Once the application is received, it is evaluated, and the bank or financial institution is approached for the loan.
      • Upon approval, the subsidy is provided by the government, and the remaining project cost is covered by the loan.
      • To apply this from vist nears CSC Center or contract  
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    • Financial Institutions:

      • The loan is provided by Scheduled Commercial Banks, Regional Rural Banks (RRBs), and State Financial Corporations.
      • These institutions provide loans to the beneficiaries at a concessional interest rate.

      • Advantages of PMEGP Loan:

        • Low Interest Rates: The loans are offered at lower interest rates compared to commercial loans.
        • Subsidy Support: The subsidy significantly reduces the financial burden on the beneficiaries.
        • Employment Generation: By promoting the establishment of micro-enterprises, PMEGP helps create employment opportunities, especially in rural and semi-urban areas.
        • Inclusive Growth: The scheme particularly supports marginalized groups like women, SC/ST, OBC, and physically challenged individuals by providing them with higher subsidies.
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