PMEGP Loan

PMEGP's full form is the Prime Minister’s Employment Generation Programme. Under the PMEGP scheme, the Government of India offers a subsidy on various projects based on different criteria. The maximum amount of the project/unit permitted in the manufacturing sector under the scheme is limited to Rs. 50 Lakhs, while the limit set for the service/business sector is Rs. 20 Lakhs.

You can apply for a second loan of up to Rs. 1 Crore for the upgrade or expansion of your PMEGP/REGP/MUDRA unit. The government subsidy available under the second loan varies from lender to lender.

Following are the key PMEGP loan details:

The following are the PMEGP loan eligibility criteria:

• Any individual aged above 18 years
• There is no income ceiling for assistance in setting up projects under the PMEGP loan process.
• For setting up a project costing more than Rs. 10 Lakhs in the manufacturing sector and more than Rs. 5 Lakhs in the business/service sector, the beneficiaries must have at least 8th standard pass educational qualification.
• Assistance under PMEGP is available only for new projects sanctioned specifically under the PMG loan.
• Self Help Groups, Institutions registered under the Societies Registration Act, of 1860, Production Co-operative Societies, and Charitable Trusts are also eligible for assistance under PMEGP.
• Existing Units (under PMRY/ REGP/ any other Government of India or State Government scheme) and the units that have already availed any Government Subsidy under any other Government of India/ State Government scheme are not eligible.
• The applicant must have accurate and complete PMEGP loan documents.

The categories of PMEGP subsidy rate under the programme are given below:

The PMEGP loan scheme interest rate usually vary bank to bank, and the repayment tenure can vary from 3 to 7 years after an initial moratorium period of up to 6 months. The interest rate varies from bank to bank depending on the applicant’s profile, project cost, and business stability.

Below are the documents required for the PMEGP loan:

• Aadhaar card
• PAN card
• Caste certificate
• Project report
• Special category certificate
• Rural area certificate
• Education/ skill development/ Entrepreneurship Development Programme training certificate.
• Registration certificate, authorisation letter, and certificate for special category (when required), for institutions.

The Divisional/State Directors of KVIC in consultation with the Director of Industries of respective states and the Khadi and Village Industries Board release local advertisements through electronic and print media inviting applications with project proposals from potential beneficiaries who are looking to start a service unit or establishing an enterprise under the programme.

The process to apply for PMEGP loan yojana on the portal is mentioned below in the steps:

• Visit any one of the websites from kviconline.gov.in or my.msme.gov.in for the PMEGP online application. 
• Click on the ‘Prime Minister Employment Generation Programme’ tab or ‘PMEGP ePortal’ on the PMEGP e portal. 
• Now click on the ‘Application Form for Individual’ option and the application form will be displayed on your screen. 
• The portal has two unique application forms. One for institutional applicants and another one for individuals.
• Fill in the application form by providing all the required details including your name, type of activity, sponsoring agency, educational qualification, bank account details, and so on. 
• Then click on the ‘Save applicant data’ tab. 
• Upload the required documents and submit them. 
• On submitting your documents along with the application form, an application ID and a password will be sent to your registered mobile number. 

You can check the Pradhan Mantri Employment Generation Programme loan application status through the PMEGP e-tracking system.

• Visit the PMEGP portal or kviconline.gov.in/pmegp/ for PMEGP tracking.
• Now click on the ‘Login Form for Registered Applicant’ option.
• A new page will be opened where you can view the login and password fields.
• Now enter your login ID and password before clicking on the ‘Login’ button.
• Now you can check the status of your PMEGP loan application by clicking on the ‘View Status’ tab.

• The scheme is offered by 27 Public Sector Banks, all Regional Rural Banks, Co-operative Banks approved by State Level Task Force Committee headed by the Principal Secretary (Industries)/Commissioner (Industries), Private Sector Scheduled Commercial Banks approved by State Level Task, Force Committee headed by Principal Secretary (Industries)/Commissioner (Industries), and Small Industries Development Bank of India (SIDBI).
• The identification of beneficiaries will be completed at the district level by a Task Force including representatives from KVIC/State KVIB, State DICs, and Banks.
• The Bank will provide up to 90% of the project cost for General Category beneficiaries/institutions and up to 95% for special category beneficiaries/institutions, and disburse the entire amount suitably for setting up of a project.
• The bank will finance Capital Expenditure through the way of Term Loan, Working Capital (in the form of cash credit), or Composite Loan including Capital Expenditure and Working Capital.
• The amount of Bank Credit will range between 60% to 75% of the total project cost after deducting 15% to 35% of margin money (subsidy) 10% owner’s contribution from beneficiaries belonging to the general category and 5% from beneficiaries belonging to special categories.
• The working capital component should be utilised in such a way that at one point, it touches the 100% limit of Cash Credit within 3 years of the lock-in period of subsidy and not below 75% utilisation of the sanctioned limit. If it does not meet the said limit, the proportionate amount of the subsidy is to be recovered by the Bank/Financial Institution and refunded to the KVIC at the end of the third year.
• A normal interest rate shall be charged on the PMEGP loan.
• The repayment schedule may range between 3 to 7 years after a moratorium period as prescribed by the concerned bank/financial institution.
• Any Village Industry including Coir-based projects (except the ones mentioned in the negative list) located in a rural area that produces any goods/ renders any service with/ without the use of power and in which the fixed capital investment per head of a full-time artisan/ worker (i.e. Capital Expenditure on workshop/ workshed, machinery, and furniture divided by full-time employment created by the project) doesn’t exceed Rs. 1 Lakh in plain areas and Rs. 1.50 Lakhs in hilly areas.
• Project proposals will be invited by potential beneficiaries at the district level via press, advertisement, radio, and other multimedia by KVIC, KVIBs, and DICs at periodical intervals based on the target allotted to that particular 6 district.
• The PMEGP scheme will also be advertised through the Panchayati Raj Institutions.
• Online applications are mandatory and no manual applications are allowed w.e.f. 01.05.2016.
• There are two separate online application forms for individuals and institutional applicants on the portal.
• Applicants are provided with a User ID and Password on initial registration (application filing) for tracking the status of their application.
• Applicant’s Aadhaar number will be required and if an Aadhaar number is not available, the PAN Card of the individual/enterprise or operational Bank account number of the institution can be furnished.
• Under the PMEGP loan sanction process, within 48 hours or 2 working days of receiving the application, the nodal officer of KVIC, State KVIB, and DIC will interact with the applicant personally on telephone/personal meeting and confirm the receipt/ acceptance of the application for preliminary scrutiny.
• The bank will appraise the projects and take credit decisions based on the viability of each PMEGP project.
• The bank will not insist on any collateral security in line with the guidelines of RBI for projects involving a loan up to Rs. 10 Lakhs in respect of the projects cleared by the Task Force.
• The banks will have to either sanction or reject the loan application within the stipulated period (i.e. within 30 days from the receipt of DLTFC recommended application from the District Agencies).
• Applicants are not required to wait for the sanction of the loan. However, they can undertake EDP training at any time after submitting the application form in consultation with the State Office of KVIC on payment of EDP charges.
• The applicant has to deposit their contribution and copy of the EDP training certificate to the financing bank within 10 working days of receiving the communication of the sanction of the loan.
• The bank will release the first installment of the PMEGP loan either in full or part and submit the subsidy claim online through the online portal of Nodal Bank/KVIC online portal.
• Nodal Bank will transfer the subsidy claim amount validated by the KVIC to the respective financing bank branch within 24 hours of the receipt of validation.
• Once the bank receives the subsidy in favour of the loanee, within 24 hours it should be kept in the Term Deposit Receipt of 3 years at the branch level in the name of the beneficiary/Institution. No interest will be charged on the loan disbursed to the corresponding amount of TDR and no interest will be paid on the TDR.
• If the bank’s advance goes “bad” before the 3 years, due to any reason, beyond the control of the beneficiary, the subsidy will be returned to the KVIC along with the interest.
• Subsidy will be ‘one-time assistance’, from the Government and no assistance is available for any enhancement of credit limit or for expansion/modernization of the project.
• Projects financed jointly i.e. financed from 2different sources, are not eligible for subsidy assistance.
• The bank has to obtain an undertaking from the beneficiary prior to the release of Bank Finance that in the event of an objection by KVIC/ KVIB/ State DIC, the beneficiary will refund the subsidy kept in the TDR or released to them after 3 years.