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Every business needs initial capital to kickstart the business. Some may manage it with the support of funds from the family. However, not every family has the capability to do. In such cases, the government of India’s Pradhan Mantri Rozgar Yojana (PMRY) has helped many budding entrepreneurs to arrange for initial funds to start a business. It PMRY scheme is one of the popular schemes for new entrepreneurs. Let’s understand what PMRY is, the features of the PMRY yojana, the eligibility criteria and the application procedure for PMRY loans.
What is Pradhan Mantri Rozgar Yojana (PMRY scheme)?
The full form of the PMRY scheme is Pradhan Mantri Rozgar Yojana. It was launched to provide employment and create earning opportunities for the youth in the country.
PMRY was started in 1993, the scheme offers financial support to budding entrepreneurs to kickstart their businesses in the sectors of manufacturing, trading or services. The aim of the PMRY scheme is to generate employment opportunities by providing financial assistance to budding entrepreneurs who may limited access to funds otherwise. Moreover, the scheme also aims at providing fundamental training of doing business to new entrepreneurs.
Also read: ASPIRE scheme that aims to set up incubation centres and technology centres for entrepreneurs.
Key features of the PMRY scheme
Here are some of the key features of the Pradhan Mantri Rozgar Yojana.
- Loan amount: Collateral free loan of up to ₹1 lakh at the prevailing loan interest rate.
- Collateral: Collateral is not required for the loan of up to ₹1 lakh.
- Repayment period: The repayment period is 3 to 7 years after the initial moratorium period.
- Application process: The application form needs to be downloaded online and submitted physically at the authorised bank.
- Training: Candidates must undergo a training programme that focuses on how to set up a business.
- Project details: Limit for the cost of the project is ₹2 lakh and ₹5 lakhs in case of groups.
- Implementation agency: Implementation agencies for the PMRY scheme is the metropolitan cities.
Eligibility criteria of Pradhan Mantri Rozgar Yojana (PMRY)
As mentioned before, PMRY or Pradhan Mantri Rozgar Yojana is designed for budding entrepreneurs and aims at generating employment for unemployed youth. As a result, the eligibility criteria of the scheme are listed accordingly. Here are the eligibility criteria for getting a loan under PMRY.
- Applicant must be an Indian citizen.
- Employment status should be unemployed.
- The age of the borrower should be between 18-35 years. However, the age limit for SC/ST and women entrepreneurs is relaxed to 45 years.
- The minimum educational qualification is 8th standard pass out.
- The family’s monthly income including spouse and parents should not be more than ₹40,000.
- Should not be a defaulter in any other bank or NBFC loan .
- All business activities manufacturing, service and trading are eligible except direct agriculture related business activities. Direct agricultural activities are not eligible for the scheme.
PMRY loan scheme application process
Here is how you can apply for the PMRY scheme.
- Download the application form from the PMRY scheme’s official portal which is https://pmrpy.gov.in/.
- Fill in the form and with the requisite details.
- Then, you need to submit the form along with the required documents to District Industries Centre (DIC) or the nearest PMRY-authorised bank.
- Once your application is reviewed, the bank will contact you. You may be called for an interview.
- The loan is approved basis of the verification of the documents.
Procedure after the PMRY loan is approved
- Once the loan is approved, project implementation can begin.
- Candidates are called for a training programme and a certificate is awarded on completion of the training programme. This certificate is one of the required documents for obtaining the loan.
- The project grounding begins. Grounding involves arranging for margin money, seeking necessary permissions and clearances, etc.
Documents required for the PMRY scheme
Generally, all loan schemes require a list of a common documents. However, the PMRY scheme requires a few additional documents. Here is a list of documents required if you are seeking a loan under Pradhan Mantri Rozgar Yojana.
- Duly filled application form
- Proof of date of birth
- Proof of educational qualification
- Proof of residence address
- Income certificate issued by Mandal Revenue Officer (MRO)
- Caste certificate from MRO (if applicable)
- EDP training certificate
Note: It is best to get an exhaustive list of documents from the bank as it may vary from time to time.
Also Read: PMEGP scheme
Tips to obtain a loan under the PMRY scheme
- Determine your business needs and analyse the amount of loan you need to start the business.
- Have a robust business strategy plan in place.
- Do not only rely on one scheme, explore multiple options getting funds for your business and choose that suits you the best.
- The government of India has many schemes, explore what suits you the most. Apart from that you can also choose to take loan from bank or NBFC.
Note: The government has launched several other loan and subsidy schemes to aid MSMEs such as Start-up India scheme, Stand-Up India scheme, ECLG scheme etc.
Frequently asked questions on the PMRY scheme
Here are answers to some frequently asked questions:
Can entrepreneurs having existing businesses apply to PMRY scheme?
No. Entrepreneurs with existing businesses are not eligible to obtain loans under the Pradhan Mantri Rozgar Yojana.
Does the borrower have to bear any cost/charges to avail PMRY loans?
You may have to bear the cost of training which is roughly around ₹1500.
Is the PMRY training programme mandatory?
Every selected candidate needs to undergo 15-20 days training. The certificate of completion of the training programme has to be produced.
