PMFME Loan Scheme

The Ministry of Food Processing Industry (MoFPI) has launched the PMFME or Pradhan Mantri Formalisation of Micro Food Processing Enterprises scheme under the Aatmanirbhar Bharat Abhiyan. The scheme aims at enhancing the competitiveness of existing individual micro-enterprises in the unorganised segment of the food processing industry and promoting formalisation of the sector. The PMFME loan scheme is implemented over a period of 5 years from 2020-21 to 2024-25 with a total outlay of Rs. 10,000 Crore. PM FME specially focuses on supporting Groups that are engaged in Agri-food processing such as Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), and Producers Cooperatives along their entire value chain. The central government and state governments will share the expenditure in a ratio of 60:40. In North-Eastern and Himalayan states, the share ratio by the central government and state government is 90:10.

The following are the main benefits of the PM FME scheme:

• The scheme covers around 2 lakh micro food processing units through credit-linked subsidies.
• Individual units will receive financial assistance through this scheme to improve the food processing facility.
• This scheme works towards building the capability of entrepreneurs via skill training, technical knowledge transfer, and support services.
• The scheme supports food processing entrepreneurs through credit-linked capital PMFME scheme subsidy of 35% of the eligible project cost with a maximum ceiling of Rs. 10 Lakhs per unit.
• The scheme focuses on working towards increasing the integration with organised supply chains through marketing.
• PMFME supports existing enterprises in transferring to formal organisations and getting registration through the regulatory framework with compliance.

The interest rate for PMFME loans differs from one bank to another. For instance, the State Bank of India offers PMFME loans at an interest rate starting from 8.50% p.a. while the Central Bank of India offers it at an interest rate starting from 11.35% p.a. Benefits under the PMFMS scheme include 3% interest subvention and credit guarantee support.

Apart from the applicable interest rate, banks also charge a processing fee on PMFME loans, usually ranging from 0.50% to 1% of the sanctioned limit. The fee is subject to revision by bank from to time as per the Bank’s extant guidelines.

You can apply for the PMFME scheme online. Follow the steps given below for the PMFME online application:

• Visit the official website of PMFME.
• Complete the PMFME login process by clicking on ‘Login’ and on ‘Applicant Registration’.
• Then enter the required details on the online application form and click on the ‘Register’ button.
• Click on ‘Login’ to log in to the PMFME website and then select the ‘Applicant Login’ option.
• Enter the User ID and password before clicking the ‘Submit’ button.
• Select the ‘Apply Online’ option from the dashboard and fill out the applicable form with all the details. 
• Click ‘Submit’.

You will need the following documents to apply for the PMFME scheme:

• PMFME application form and 2 passport-size photographs.
• Identity proof such as a Driving License/ Aadhaar Card/ Voter ID Card/ Passport.
• Address proof such as a Voter ID Card/ Driving License/ Aadhaar Card.
• Detailed Project Report (DPR)
• Any other document as per sanction.

Different eligibility criteria have to be met for different types of assistance. These criteria are as follows:

Common Infrastructure Development

• All FPOs, cooperatives, and SHGs must be engaged in the processing of ODOP produce for a minimum of 3 years.
• FPOs and cooperatives must have a minimum turnover of Rs. 1 Crore. Also, the project cost should not be more than the present turnover.
• FPOs, SHGs, and cooperatives should have internal resources to meet 10% of the project’s cost and margin money for working capital. 

Branding and Marketing 

• The branding and marketing proposal must relate to ODOP. 
• The product’s minimum turnover should be Rs. 5 Crores.
• The final product must be sold to the consumer in a retail pack.
• The products and producers must be scalable to larger levels.
• The entity must have management as well as entrepreneurship capabilities for promotion.

Capacity Building and Research

• Individual units as well as groups get support for capital investment. 
• Other existing units and groups in the districts that process ODOP products. 
• Groups that receive support for marketing and branding.

Support to Food Processing Units

• Individuals or partnership firms have ownership rights of the enterprise.
• Existing micro food processing units that are verified by the resource person. 
• Existing micro food processing units in operations.
• Applicants should be aged above 18 years and must possess at least 8th standard pass educational qualification. 
• Only one person from one family can get financial assistance under the scheme. The family includes self, spouse, and children.

Seed Capital for SHGs

• Only SHG members are engaged in food processing presently.
• SHG members have to commit to using the amount for working capital and purchasing small tools and make a commitment in this regard to the SHG federation as well as SHG.

Following are the banks offering the PMFME scheme list:

• Bank of Baroda
• State Bank of India
• Union Bank of India
• Canara Bank
• Central Bank of India
• Bank of India
• Indian Bank
• J&K Grameen Bank
• Punjab National Bank
• UCO Bank
• Bajaj Finserv