Chapter 3 – Government Sponsored Scheme

Prime Minister’s Employment Generation Programme (PMEGP)

Launched on : 10.10.2008 by merger of PMRY (Prime Minister’s Rojgar Yojna) and REGP  (Rural Employment Generation Programme)

Objective : To generate employment opportunities in rural as well as urban areas of the country through setting up of new micro enterprises.

Eligibility :

Age : Above 18 year

Income : No income ceiling

Education : only in two cases 8th pass mandatory if

Project Cost > 10 Lac in Manufacturing

Project Cost > 5 Lac in Business or Service Sector

Project Cost:

Manufacturing Sector: Max 25 Lakh

Business/ Service Sector: Max: 10 Lakh

Subsidy :

  • General Category: Urban – 15%, Rural – 25%
  • Special Category:Urban – 25%, Rural – 35%

Special Category include: SC/ST, OBC, Minorities, Women, Ex-Servicemen, Physically Handicapped, NER,  Hill Border Area etc.

Borrower Margin :

10% in general category

5% in special category

Security : No collateral security for loan upto 10 lakh

Repayment : 3 to 7 years after an initial moratorium as prescribed by bank.

Implementing Agencies : KVIC – Khadi Village Industries Commission

Identification of Beneficiaries : A task force will do the identification of beneficiaries at the district level consisting of representatives from KVIC/State KVIB and State DICs and Banks.

Other Detail

  • PMEGP is meant only for new projects.
  • Only one person from one family is eligible for obtaining financial assistance for setting up of project under PMEGP
  • The family include self and spouse
  • Subsidy will be kept as interest free FDR for 3 year
  • No interest should be paid on the FDR
  • No interest on loan on the corresponding amount
  • Margin money should be credited to the loan account after three years from the date of disbursement, in case of default (bad) loan before three year subsidy will be adjusted by the bank to liquidate the loan facility.

DAY NRLM – Deendayal Antyodaya Yojana – National Rural Livelihood Mission

Launched by : Ministry of Rural Development, GOI by replacing the existing SGSY Scheme

Objectives: Reduction of Poverty in rural area, only women SHG will be financed, but males with disabilities, elders, transgender, can also become members.

No. of Members: 10-20

In difficult area, groups with disabled persons, and in remote tribal areas- 5 to 20

Revolving Fund: Govt. provide Revolving Fund

Corpus of Revolving Fund : Min 10,000 Max 15,000 per SHG

Condition for Revolving Fund

  • SHG in existence from min 3-6 months
  • Following ‘Panchasutra’
  1. Regular Saving
  2. Regular Internal Lending
  3. Regular Meeting
  4. Regular Recoveries
  5. Maintenance of proper books of accounts.

Subsidy : No capital subsidy under the scheme

Bank Finance : After 6 month from observation of account group observes 5 rules

Loan to be given in 4 doses as under: Depend upon economic activity and progress of economic activity

1st  Dose : 6 times of group saving (Corpus) or min Rs. 100000 whichever is higher

Repayment Period: 6-12 months

2nd  Dose: 8 times of group Corpus or min Rs. 200000

Repayment Period: 12-24 months

3rd  Dose: Minimum of Rs. 3 Lac

Repayment Period: 2-3 years

4th  Dose: Minimum of Rs. 5 Lac

Repayment Period: 3-6 years

Security and Margin – NIL for Loan upto 10 Lac

Interest Subvention:

  • Available to all SHG Loans
  • SHG to get finance at 7% for loans upto Rs. 300,000/-
  • Difference between the Lending Rate of the banks and 7%, with a maximum of 5.5% to be provided as subsidy

Additional Subsidy for prompt Repayment: 3% to borrower if loan is repaid in time effective ROI – 4%

DAY NULM – Deendayal Antyodaya Yojana – National Urban Livelihood Mission

Started by GOI, Ministry of Housing and Urban Poverty allevation in place of SJSRY

Reservation : 

Women under SHG : 30%

Differently-abled : 3%

Minority : 15%

SCs and STs : In the ratio in local population

Individual Enterprises

  • Age : 18 years at the time of applying for loan
  • Project Cost :Max 2 Lac
  • Collateral :No collateral required
  • Repayment :(5-7) years after initial moratorium of 6-18 months
  • Margin : NIL upto 50,000 above (5-10)% of project cost

Group Enterprises

  • Eligibility: Min 3 members with a minimum of 70% members from urban poor families
  • Project Cost: Max 10 Lac
  • Collateral : No collateral required
  • Repayment: (5-7) years after initial moratorium of 6-18 months
  • Margin : NIL upto 50,000 above (5-10)% of project cost

Subsidy – No Capital Subsidy

ROI from borrower : 7%

Interest Subsidy : ROI charged by bank upto 3 Lac : 7%  If loan is repaid in time

Additional subvention of 3% only to Women SHGs if loan is repaid in time (for prompt payment)

Funding Pattern: Central: State Govt (75% : 25%)

In case of special category states ratio will be (90:10)

Special category states

Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, J & K, Himachal Pradesh and Uttarakhand State

SRMS – Self Employment Scheme for Rehabilitation of manual Scavengers

Manual scavenger, mean a person engaged or employed by an individual or a local authority or an agency for manually cleaning, disposing of

Launched by : National Safai Karamchari Finance and Development Corporation (NSKFDC)

  • Cash Assistance :Cash assistance of Rs. 40,000/- payable in monthly installment of Rs. 7000
  • Project Cost :Rs. 10 Lakh and 15 Lakh, in case of sanitation related projects
  • Moratorium :upto 2 years
  • Maximum Period of Training : 2 years and stipend during training period is Rs. 3000 per month
  • Repayment : For project costing upto 5 lakh : 5 year and for projects costing more than 5 lakh : 7 year
  • ROI : Project cost upto 25000 : 5% (4% for women), and above 6% p.a.
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