Know about the Finance and Investments Terms

Pradhan Mantri Employment Generation Programme (PMEGP) is reported to have employed approximately 11.13 lakh individuals from 2016 to 2018. 

It also aims to encourage individuals to start their own small-scale business through subsidised loans, as it paves way for employment opportunities for the masses. 

PMEGP scheme provides a subsidy to relieve the repayment burden of individuals availing credits from financial institutions. Businesses being operated in urban areas are eligible to enjoy a 15% rebate, while rural businesses enjoy a 25% subsidy rate. 

How does the PMEGP loan scheme work?

Through such loans, companies can finance any projects at nominal interest rates. While organisations in the manufacturing sector can avail loans valued up to Rs.25 lakh, services sector companies have a borrowing limit of Rs.10 lakh under this scheme. 

Individuals need to fund at least 10% of the total credits availed by themselves, while 60%-75% can be obtained from lending institutions around the country. 

PMMEGP loan interest rate ranges around 11%-12%, while 15%-25% of the total project expense is funded by the government. 

Eligibility criteria for PMEGP application – 

Individuals fulfilling the following criteria can easily make a PMEGP online application – 

1. Applicant should be above 18 years. 
2. Educational qualification should be at least till the 8th standard to avail business loans above Rs.10 lakh (manufacturing sector) and Rs.5 lakh (services sector). 
3. Self-help groups can apply for credits against the Prime Minister’s Employment Generation Programme.
4. Entrepreneurs running a business registered under the Societies Registration Act of 1860 can learn about PMEGP loan details to know about total credits sanctioned to them. 
5. Applicants running a charitable trust. 
6. Individuals operating co-operative societies.

Such business loans are usually extended for the tenor of up to 7 years, wherein borrowers have to repay 60%-75% of the total project expenses.