How to Apply for PMEGP Loan – Complete Guidekamlesh
PMEGP stands for Prime Minister’s Employment Generation Programme. It is a credit linked subsidy programme that is managed by the ministry of micro, small and medium enterprise under the government of India. The complete scheme is implemented by the Khadi and Village Industries Commission (KVIC), KVIB and district industries centre at a state level.
More about PMEGP?
The Prime Minister’s Employment Generation Program (PMEGP) falls under Khadi and Village Industries Commission whose director is Shri K. S Rao. The scheme by the KVIC is implemented at a national level and PMEGP is a combination of two schemes that was there till 2008, the first one is Prime Minister’s Rojgar Yojna and Rural Employment Generation Programme.
The main objective behind releasing this employment generation program is to give the employment opportunity to the people who are living in the rural as well as urban areas. This opportunity will be provided by setting up the self employment ventures at different locations.
The self-help group can also apply for this loan only if they have not availed benefits from other available schemes.
PMEGP was proposed in 2000 but it formally came into existence during 2008 and it offered more than 4 lacs jobs in order to reduce unemployment from the country. This loan is release for the people who are not able to do a job because of some reasons. If they get the PMEGP loan, they can help themselves by starting micro enterprises or working as self-employed ventures.
Only one member from every family is eligible for getting the financial assistance from this scheme and the scheme is only available for new projects.
I am here to tell you about how to get PMEGP loan, what is the PMEGP loan criteria, various PMEGP guidelines, which are the PMEGP listed banks, PMEGP subsidy schemes and more.
Let see what you need to do to get PMEGP Loan. You can only fill up the form through online mode, manual submissions of application form is not allowed w.e.f 1st May 2016.
Here is the registration link.
How to get PMEGP Loan?
The process to get PMEGP loan is very easy. All you need to do is satisfy the given criteria and provide some of your identity documents as per written in the form.
This loan is specially for those who want to start their new business not to expand the business. Make sure you are applying for new business. You will be asked about your business in the meetings.
Below is the complete process of how to get PMEGP Loan.
Read the steps carefully and follow them one by one in order to get the loan.
- If you have decided what your project is, when and where you are going to start it and how much amount you want as loan, make a complete project report on it that include every details related to your project.
Here is the link from where you can get an idea to create a project report
- Apply for PMEGP loan on the KVIC website by providing your details.
- Once you submit your application, you will be called for an interview that will be conducted by kvi c, dic, kvib nodal agency.
- But before appearing in an interview, talk to the respective banks and tell them that you want the PMEGP loan.
- You need to submit the communication letter that you will receive from bank.
- If your project will be selected, they will forward it to the respective bank which is ready to provide you the loan.
- Next is you need to submit the required documents at the bank.
- Once the documents are submitted, the bank will investigate your project place and your application process will start.
- Your bank will sanction the loan and you have to submit that sanction letter to EDP training centre only then you can avail the EDP training.
- Get EDP training and submit the training certificate it in kvic, kvib, dic and bank.
- Your bank will receive the subsidy sent by the government.
These are the steps you need to follow in order to get PMEGP loan. But, eventually, only new entrepreneurs can get the PMEGP loan.
Now let’s move on and see what the PMEGP Loan criteria are. Yes, you need to fulfil some criteria in order to get the PMEGP loan.
What are the PMEGP Loan criteria?
There is a fixed criteria that you need to fulfil if you want to get the PMEGP loan. Below are the PMEGP loan criteria:
- If you are more than 18 years, then only you are eligible to apply for PMEGP loan.
- You must have cleared VIII standard in order to setup the project that is of Rs. 10 lacs or above in manufacturing sector and above Rs.5 lacs in business sector.
- You can only apply for loan if your project is new. Old or existing project will not be accepted.
Mentioned above are the PMEGP Loan criteria. Go through the criteria and if you think that you satisfy all these conditions, then only apply for the otherwise you will not get the loan or you will face multiple issues throughout the process.
You can easily apply for PMEGP loan but do you know which banks are providing this loan? If no, then below is the complete list of banks that provides the PMEGP loan.
- Central Bank of India.
- Vijaya Bank.
- Union Bank of India.
- Dena Bank.
- Small Industries Development Bank of India.
Once your application is approved and you complete at least 2 weeks of PMEGP EDP training, your respective bank will release the first instalment of the term loan.
Industries that cannot get the PMEGP Loan?
Any industry that manufactures beedi, pan, cigarette, tobacco or liquor will not get the assistance under this program. Companies that are already getting benefit from the Khadi program will not be entertained. Industries that sell tea, coffee, rubber, or any animal husbandry will not get the PMEGP loan. Those industries that are related to plastic items that pollutes the environment will not get the loan.
If you belong to scheduled cast, if you are ex-servicemen, schedule tribes, or other backward class, you can apply for the loan. If you are from north eastern area, border area or hill areas, you can easily become the beneficiary under this program.
Industries that can become the beneficiary of PMEGP Program?
- Agro – based food processing industries.
- Polymer and chemical based industries.
- Industries that are forest based.
- Biotech and rural engineering industries.
- Paper industries.
- Textile industries.
- Industries based on minerals.
PMEGP Subsidy Scheme?
You can get all the information regarding the PMEGP Subsidy Scheme from the table I have mentioned below. Go through the PMEGP Subsidy Scheme and then provide your details accordingly.
|Categories of beneficiaries under PMEGP||Beneficiary’s own contribution (of project cost)||Rate of Subsidy|
|Area (location of project /unit)||Urban||Rural|
|Special (including SC/ ST/ OBC/ Minorities/ Women, Physically handicapped, Ex-Servicemen, NER, Hill and Border areas etc.||05%||25%||35%|
PMEGP Project Report: How to create project report for PMEGP?
The total amount you take as loan will be divided into working capital and capital expenditure. The capital expenditure includes workshed and machinery cost and the means of finance in this is term loan for fixed capital or own contribution whereas the means of finance in working capital is cash credit.
Your project report will be including corporate credit (CC) through which your vendor will get the loan amount and you can borrow from your vendor. The amount will be provided to you through cheque that means you will not get the cash. In order to get loan, try to get maximum amount approved and minimize your working capital amount. If you include all these points, you can easily generate your project report.
Note: You can borrow the cheque from your vendor as your vendor will get the amount.
Important Points to Remember:
- Do not trust anyone expect the actual banks providing the PMEGP loan. There are thousands of fraudsters who will call you and say that we provide you this and this scheme, all you need to do is provide us your confidential data and rest is our responsibility. Never entertain these kinds of calls, just ignore them.
- It is an online process, so security is not a problem but still never give money to agents. They can be frauds also.
- Interest rates will be same. It can change from bank to bank but it will be same as regular loans.
- Maximum subsidy is 35% not more than that.
- You can only apply for 25 lacs.
- Take proper advice from the financial agents working at the bank.
So, this was all about PMEGP loan.