The PMEGP (Prime Minister's Employment Generation Programme) loan scheme is a flagship initiative of the Government of India aimed at promoting entrepreneurship and generating employment opportunities. It was launched by the Ministry of Micro, Small and Medium Enterprises (MSME) in 2008.
The PMEGP loan scheme provides financial assistance to individuals and groups for setting up new micro-enterprises or expanding existing ones in the manufacturing, service, or agriculture sectors. The scheme encourages first-generation entrepreneurs and focuses on economically weaker sections of society, including women, SC/ST individuals, ex-servicemen, and differently-abled persons.
Key features of the PMEGP loan scheme include:
Subsidized Loans: The scheme offers a composite loan, comprising of both a bank loan and a subsidy component. The loan is provided by eligible banks and financial institutions, and the subsidy is provided by the government.
Loan Amount: The loan amount can range from a minimum of Rs. 10 lakh to a maximum of Rs. 25 lakh, depending on the project's cost and the borrower's contribution.
Subsidy Percentage: The subsidy component can be up to 35% of the project cost in urban areas and 25% in rural areas. For beneficiaries from special categories like women, SC/ST, or differently-abled individuals, the subsidy can be up to 25% in urban areas and 35% in rural areas.
Margin Money: The borrower's contribution, known as "margin money," ranges from 5% to 10% of the project cost, depending on the category of the beneficiary.
Interest Rate: The interest rate on the loan is determined by the lending institution, but it is generally lower compared to regular commercial loans.
Repayment Period: The loan repayment period varies based on the nature of the project and the repayment capacity of the borrower. It typically ranges from 3 to 7 years.
To avail of the PMEGP loan scheme, individuals or groups need to submit their project proposals to the District Industries Centre (DIC) or Khadi and Village Industries Commission (KVIC) offices. These agencies evaluate the proposals and recommend eligible projects to the banks for loan sanctioning.
It's important to note that the specific details and guidelines of the PMEGP loan scheme may change over time. Therefore, it is advisable to visit the official website of the Ministry of MSME or consult with the relevant authorities for the most up-to-date information and application procedures.