PMEGP Loan Scheme: ₹50 Lakhs For Small Business, No Collateral Needed For Loans Upto ₹10 Lakhs

If you're looking to kickstart your small business but lack the financial resources, the Prime Minister's Employment Generation Program (PMEGP) offers an excellent opportunity. This credit-linked subsidy scheme provides loans for projects in the manufacturing sector up to Rs 50 lakhs and in the service sector up to Rs 20 lakhs. While the applicant needs to contribute 5 per cent of the total project cost, the rest is covered by a bank loan. A total of Rs 13,554 crores have been allocated for PMEGP for the financial period from 2021-22 to 2025-26.

35 per cent Subsidy for Rural Areas, 25 per cent for Urban Areas

One of the key benefits of this scheme is the subsidy it offers. Rural beneficiaries are eligible for a 35 per cent subsidy, while those in urban areas can avail of a 25 per cent subsidy. For loans up to ₹10 lakhs, applicants do not need to provide any collateral. The program aims to empower traditional artisans and unemployed youth by providing them with opportunities to start small businesses, helping to reduce rural-urban migration. The Khadi and Village Industries Commission (KVIC), operating under the Ministry of MSME, is the sole agency responsible for implementing the scheme.

Eligibility Criteria for Applicants

-The applicant must be an Indian citizen.

-The applicant should be at least 18 years old.

-The applicant must have completed at least 8th grade.

-Applicants who are already receiving subsidies under other government schemes for the same business are not eligible.

Steps to Apply Online

- Visit the official website of the Khadi and Village Industries Commission (KVIC).

- Click on the PMEGP section, which will take you to the program's dedicated page.

- Click on "Apply" under the "Application for New Unit" section.

- Fill out the application form with all the required information.

- Tick the declaration box and click on "Save Application Data."

- Once your form is submitted, you will receive a user ID and password.

Documents Required for Application

- Caste certificate

- Special category certificate, where applicable

- Rural area certificate

- Project report

- Education, EDP, or skill development training certificate