All you need to know about PMEGP Scheme. (Prime Minister Employment Generation Programme)

Hey everyone, this video is about PMEGP Scheme and today I am going to tell you how you can avail loan under this scheme. But before starting let me introduce myself first. My name is Lavish Gupta and I am a Chartered Account by Profession. You guys can contact me on Instagram @lavishgupta1. So, in this video I am going to explain you all 4 things which is

what is this scheme?
Who are eligible to apply under this scheme
Where to Apply and
How to Apply?

Let's start with what.

Under this scheme, a new unit can avail loan and get subsidy on such loan. So this loan is only applicable to new units, not the existing ones. Important point to note here is that this scheme in itself does not provide loan, but provides subsidy so that more people will start business and generate employment. And this scheme is available only to Manufacturing & Service Sector. So, if you are doing a trading Business, you won't get loan under this scheme. Okay.

For Manufacturing Unit, maximum amount of loan is Rs. 50 lakhs and for Service Units, maximum amount is Rs. 20 lakhs. And as I said trading units will not get loan under this scheme, so it is nil for it. If in case, you guys want loan higher than this amount, you can also get that but the Subsidy will be calculated maximum on these amounts.

As I said that you get Subsidy under this scheme which is as follow.

If the location of the project is Urban and you belong to General Category then you will get subsidy @15%. But in case you guys belong to any Special Category which are SC, ST, OBC, Minorities, Women etc, then you will get subsidy of 25%.

Also in case the location of the project is Rural Area, then General Category will get 25% and Special Category will get 35% subsidy.

There is another concept which is Margin Money. This requirement of Margin money is 10% for General category and 5% for Special Category.

Now, if any of you guys don't know what Subsidy and Margin money means, let me clear it for you with an example. Let's Suppose you take the loan of Rs. 10 lakh and you are eligible for 15% subsidy. Okay, so what will happen is that your loan amount will get reduced by Rs. 1.5 lakh i.e 15% of your loan amount i.e Rs. 10 lakh but this will happen after a lock in period of 3 years. Now there are some terms and conditions of getting subsidy and I have also uploaded a video on that topic so you access that video by going to the description below.

Now what is Margin Money? Let’s see an example. Suppose the estimated cost of the Project is Rs.10 lakhs, and you are eligible for 10% Margin Money. SO, what will happen is that you will get loan of Rs. 9 lakh and remaining 1 lakh, you will have to contribute yourself. That means you will get Finance of 90%.

Another thing about this scheme is that in this scheme you can get both type of loan i.e Term Loan and Working Capital Loan. Now, If you guys are not aware about what is Term Loan and what is Working Capital Loan, you can see my video and I will upload the link in the description below. But in Short, term Loan is given for Capital Expenditure. For example for purchasing P&M, Furniture and Fixture, Electric Fitting etc and It is generally repayable in Installments.

But In contrast, Working Capital loan is given for meeting day to day working of the business and it is not generally repayable but Interest has to be serviced regularly.

Also Working Capital Loan should not be more than 40% of the Project Cost. For example If the total project cost is Rs. 10 lakh, then maximum WC Loan is Rs. 4 lakh

Now the Next Question is who is eligible to get Loan under this scheme. So there are few criteria regarding that which are

First is the Individual should be atleast 18 years of age. So, if your age is less than 18, you cannot get loan under this scheme.

Second criteria is that Individual should be atleast 8th pass. But there is an exception to this criteria that if the project cost is less than Rs. 2 lakh, then this eligible criteria won't be applicable.

Third criteria is that this scheme is only applicable to new units which I have already discussed with you.

And the fourth criteria is that from 1 family only 1 person will get loan under this scheme.

Now the next question is where to apply and how to apply. So, you have to go the following website which is www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp.