PMEGP - Agri & Rural

Eligibility Criteria

• 1. Any individual, above 18 years of age.
• 2. There will be no income ceiling for assistance for setting up projects under PMEGP
• 3. For setting up of project costing above Rs. 10 lakh in the manufacturing sector and above Rs. 5 lakh in the Business/ Service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
• 4. Assistance under the scheme is available only for new projects sanctioned specially under the PMEGP.
• 5. 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.
• 6. Projects without Capital expenditure are not eligible for Financing under the scheme.
• 7. Cost of the land should not be included in the Project cost. Cost of the ready built as well as long lease or rental Work-shed/Workshop can be included in the project cost subject to restricting such cost of ready built as well as long lease or rental work shed/workshop to be included in the project cost calculated for a maximum period of 3 years only
• 8. PMEGP is applicable to all new viable micro enterprises, including Village Industries projects except activities prohibited by local Government/ Authorities keeping in view environment or socio-economic factors and activities indicated in the negative list of the guidelines
  • a. Business / trading activities in the form of sales outlets may be permitted in NER, (LWE)-affected districts and A&N Islands.
  • b. Retails outlets/business selling Khadi Products, Village Industry projects procured from Khadi and Village Industry Institutions certified by KVIC and products manufactured by PMEGP/SFURTI units only may be permitted under PMEGP (across the country)
  • c. Retail outlets backed by manufacturing (including processing)/service facilities may be permitted (across the country)
  • d. The maximum cost of the project for business / trading activities as above (a) and (b) may be Rs.20 lakh (at par with the maximum project cost for service sector)
  • e. Maximum 10% of the financial allocation in a year in a state may be used for business / trading activities as above (a), (b) and (c)
  • Only one person from one family is eligible for obtaining financial assistance for setting up of projects under PMEGP. The ‘family’ includes self and spouse.

Margin/Subsidy

For setting up of new Micro Enterprise (units)

2^nd loan for upgradation of existing PMEGP/REGP/MUDRA units

The margin money(subsidy) will be kept as TDR for 3 years. No interest will be paid on the TDR and no interest will be charged on loan disbursed to the corresponding amount of TDR (CBS Subsidy module to be used).

Banks will claim Margin Money (Subsidy) on the basis of projections of Capital Expenditure in the project report and sanction thereof, Margin Money (subsidy) on the actual availment of Capital Expenditure only will be retained and excess, if any, will be refunded to KVIC, immediately after the project is ready for commencement of production

Ø  Bank will release the first instalment of the loan either in full or partly and submit the claim for Margin Money subsidy online through the on-line portal of Nodal Bank/KVIC Portal.

Ø  The online claim form will be automatically checked for the fulfilment of two conditions (i) the date of release of first instalment is prior to the date of filing of Margin Money subsidy claim and (ii) the amount of first instalment released is more than the Margin Money subsidy amount claimed. KVIC will validate the subsidy claim and upload on to the Nodal Bank portal within 3 working days.

Ø  Nodal Bank will transfer the Margin Money subsidy claim amount validated by KVIC to the respective financing bank branch within 24 hours of the receipt of validation. If the financing bank branch certifies that all the facts furnished in the claim are true and the above activity of the unit is not under the negative list of PMEGP Scheme and is as per the norms and guidelines of PMEGP, validation by KVIC could be dispensed with and the MM claim will be sent directly to Corporation Bank portal for disbursement online by the financing bank branches.

Ø  Once the Margin Money (subsidy) is received in the Bank in favour of the loanee, within 24 hours it should be kept in the Term Deposit Receipt (TDR) of three years at branch level in the name of the beneficiary/Institution. No interest will be paid on the TDR and no interest will be charged on loan disbursed to the corresponding amount of TDR.

Ø  SMS/e-mail alerts to the applicant automatically sent by the system at each of the above stages.

Ø  In case the Bank’s advance goes “bad” before the three year period, due to reasons, beyond the control of the beneficiary, the Margin Money (subsidy) will be returned to the KVIC along with the interest. In case any recovery is effected subsequently by the Bank from any source whatsoever, such recovery will be utilized by the Bank for liquidating their outstanding dues.

Margin Money (subsidy) will be ‘one time assistance’, from Government. For any enhancement of credit limit or for expansion/modernization of the project, margin money (subsidy) assistance is not available except in case of units selected for upgradation through 2nd loan under this Scheme

Security

• Primary: Hypothecation of Assets financed by the Bank
• Collateral: No collateral security up to Rs. 10 lacs. PMEGP accounts are covered under CGFMU up to Rs. 10 lacs and loans above Rs. 10 lacs covered under CGTMSE
  Other than individual borrowers- Primary/collateral security will be taken as per Bank’s norm. Applicable Charges to be recovered.