What is PMEGP or Prime Minister’s Employment Generation Programme

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PMEGP Scheme Introduction

Prime Minister’s Employment Generation Programme PMEGP scheme is a credit-linked subsidy programme administered by the Ministry of Micro, Small and Medium Enterprises, Government of India. Khadi & Village Industries Commission (KVIC), is the nodal agency at a national level for the implementation of the scheme. At the state level, the scheme is implemented through KVIC, KVIB, and District Industries center.

Objectives of PMEGP Scheme

  1. The scheme aims to provide financial assistance to set up self-employment ventures and generate sustainable employment opportunities in rural as well as urban areas. 
  1. To generate sustainable and continuous employment opportunities to rural and unemployed youth as well as prospective traditional artisans and thereby halt occupational migration.

Key benefits of PMEGP Scheme

  1. Bank-financed subsidy program for setting up new microenterprises in the non-farm sector.
  1. Margin Money subsidy on Bank Loan ranges from 15% to 35% for projects up to Rs. 25 Lakh in manufacturing and Rs. 10 Lakh in the service sector
  1. For beneficiaries belonging to special categories such as SC/ST/Women/PH/Minorities/Ex-Servicemen/NER, the margin money subsidy is 35% in rural areas and 25% in urban areas. The maximum cost of projects is Rs. 25 lakh in the manufacturing sector and Rs.10.00 lakh in the service sector.

Eligibility for PMEGP Scheme

  1. Self Help Groups, Institutions registered under Societies, Production Co-operative Societies, and Charitable Trusts.
  1. Any individual, above 18 years of age can apply
  1. The beneficiaries should have passed at least VIII standard, for setting up of project costing above Rs.10 lacs in the Manufacturing Sector and above Rs. 5 lacs in the business /Service Sector,
  1. Assistance under the Scheme is available only for new projects
  1. Only one person from a family is eligible for obtaining financial assistance under the scheme.

Who is no eligible for the PMEGP Scheme?

  1. The assistance under the scheme will not be available to activities indicated in the negative list under the scheme.
  1. Existing units (Under PMRY, REGP, or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.

Process of PMEGP Scheme

  1. The own contribution of the beneficiary is 10% of the project MSME SCHEMES 5 cost in case of general category and 5% of the project cost in case of reserved category (SC/ST/OBC/PH/Women/Ex-Servicemen/ NER) beneficiaries.
  1. If the application for the loan is approved, Banks sanction and release the balance amount of 90 to 95 percent of the total project cost suitably for setting up of the units by the beneficiaries.
  1. In order to have sustainability of the projects/units set up under the scheme, support services are also provided in the form of Backward & Forward Linkages by organizing events like awareness camps, workshops, EDP training to the beneficiaries, exhibitions, etc. 
  1. The government of India has introduced an online process flow of application and disbursement of Margin Money directly to financing branches.
  1. The one-page online application form is mandatory for individuals and institutional beneficiaries on the e-portal. The application form/PMEGP MIS portal is mobile-friendly. SMS/e-mail alerts are sent to the applicant automatically by the system or by the concerned officials at the process of each stage
  1. Model Projects of different KVI activities have been put up on the PMEGP e-portal for the benefit of potential beneficiaries.
  1.  Model Village Industries projects prepared by NSIC have also been linked to the website.
  1. To increase the registration of MSMEs in the country, the Government has undertaken measures that the PMEGP units can adopt the Udyog Aadhar Memorandum (UAM) to register online

Documents recquired under PMEGP loan

  1. Assets created out of the bank’s finance.
  1. Personal guarantee of the proprietor/promoter
  1. No collateral security up to Rs. 5 lakhs.
  1. Eligible units will be covered under the Credit Guarantee Fund Scheme for Micro & Small Enterprises – CGMSE. (excluding Margin Money/subsidy component)

5. Aadhar card

6. Population certificate

7. Pan card

8. Project report

9. Caste certificate

10. Special category certificate if required

11. Rural area certificate

12. Education skill development certificate

13. Authorization letter

KVIC subsidy, bank finance granted and own amount to invest in PMEGP Scheme

 Bank financeSubsidy from KVICPromoter’s contribution
Urban areaRural area
General Category beneficiary/institution90%15%25%10%
Special category beneficiary/institution95%25%35%5%

How to apply for the PMEGP scheme?

Apply on https://www.kviconline.gov.in/pmegpeportal/ pmegphome/

Frequently asked Questions

  1. What is the rate of interest in the PMEGP scheme?

     Ans  same as other MSME loans 11 to 12 % PA

  1. What is the repayment period of the PMEGP scheme?

  Ans 3 to 7 years with an initial moratorium not exceeding 6 (six) months.

  1. How to check PMEGP application status?

How to apply for an MSME loan online?|Instant online loan

   Ans go through the KVIC Online PMEGP section i.e https://www.kviconline.gov.in/pmegp/ website. After login into the web portal. It shows ‘E-tracking System’ in big letters. Then you must fill in the login details then see the application status

  1. Is EDP training mandatory for Pmegp?

Ans EDP will be mandatory for all the PMEGP beneficiaries. However, the beneficiaries who have undergone EDP earlier of duration not less than two weeks through KVIC/KVIB or reputed training centers will be exempted from undergoing fresh EDP.

5. What is the Loan limit for a PMEGP loan?

Ans 9.5 to 23.75 lakh, The maximum project cost for the manufacturing sector is capped at 25 lakhs and for the business or service sector it is capped at 10 lakh

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