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PMEGP-Frequently Asked Questions

PMEGP-Frequently Asked Questions


We have been receiving lots of queries from our readers about Prime Minister’s Employment Generation Programme (PMEGP). Some of the frequently asked questions are answered here.

  1. Q: I’m in the business of readymade garments, hosiery goods, other articles of clothing and clothing accessories such as gloves, ties, braces etc. Whether I’m eligible for loan under PMEGP?

Reply: You are not eligible for loan under PMEGP. The financial assistance is provided only to the first generation entrepreneurs in the form of margin money.

  1. Q : What is the last date for applying to loan under PMEGP scheme?

Reply: The State/Divisional Directors of KVIC in consultation with KVIB and Director of Industries of respective states (for DICs) will give advertisements locally through print & electronic media inviting applications at periodical intervals along with project proposals from prospective beneficiaries. The scheme will also be advertised /publicized through the Panchayati Raj Institutions which will also assist in identification of beneficiaries.

  1. Q : Can you tell me on what basis should I choose the sponsoring agency (KVIC/KVIB/DIC)?

Reply: You need not worry about implementing agencies. Online submission of applications for loans under PMEGP is mandatory and no manual applications are allowed w.e.f 01.05.2016

  1. Q: DLTFC has sanctioned loan on the basis of my loan application. However, bank is not ready to sanction the approved loan. What shall I do now?

Reply:  The final sanction of project and release of loan is done at the level of concerned Bank. The Bank will appraise the projects and take their own credit decision on the basis of viability of each project. Bank has the discretion either to sanction/decline a loan.  In case bank is declining your application, you may demand the bank to give the reason for declining in writing. If you feel the reason given by the bank is not a valid reason, you may complain the matter to the higher authorities of the bank, ministry, CEO of KVIC, CMDs of the concerned banks, RBI, etc.

  1. Q: Bank is insisting for collateral security for the loan under PMEGP. Is collateral security compulsory for PMEGP loan?

Reply: Banks may ask security for the loan sanctioned by them. However, no collateral security will be insisted upon by Banks in line with the guidelines of RBI for projects involving loan up to Rs.10 lakh.

  1. Q: I have received a message from DLTFC that my loan application has been preapproved. What is the next process?

Reply: The final sanction of project and release of loan is done at the level of concerned Bank. The Bank will appraise the projects and take their own credit decision on the basis of viability of each project on receipt of preapproved credit proposal from DLTFC. If the loan is sanctioned by the bank it would claim subsidy amount from KVIC. The online claim form will be automatically checked by KVIC  for the fulfillment of two conditions (i) the date of release of first installment is prior to the date of filing of Margin Money subsidy claim and (ii) the amount of first installment 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. 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.

  1. Q: How DLTFC appraises the loan application?

Reply: DLTFC will appraise the applications on same methodology as followed by Banks for approval of loan.

  1. Q: My proposed unit will be in rural area. How will I get population certificate?

Reply: The population records of rural areas are available with the revenue departments of the State/Union Territory. You may contact revenue department of the jurisdiction where your proposed unit will be set up. You may also check up at Panchayat/Taluk office or KVIC/KBIB office and check up with them where you can get the certificate.

  1. Q: As a banker we have to finance Rs. 20 Lakhs in Pmegp scheme. Please tell me how much amount worth of collateral we have to ask?

Reply: The value of the collateral security is insisted usually based upon the type of security. In case of land and building the market value should be more than 25% to 50% of loan value, considering the forced sale value of the property which will be less than the market value. Further there is an element of accumulated interest charged on loan account which has also to be recovered by the bank.

  1. Q: I need a loan of Rs.25 lakhs. The bank is asking for security for the loan. I’m living in a rented house and don’t have any assets to offer as collateral security. How I will get the loan?

Reply:  Banks do not insist for collateral security for loans up to Rs.10 lakh as per RBI guidelines. Since you need loan of Rs.25 lakhs and you don’t have any security to offer, you may request the bank to consider CGTMSE guarantee for the loan to be released to you.  CGTSME guarantee is available for the project beyond Rs.5.00 lakhs and upto Rs.25.00 lakhs. In case bank accepts CGTMSE guarantee you need not provide either any security or third party guarantee. However, you will have to pay guarantee fee for the guarantee offered by CGTSME.

  1. Q: Whether the bank will immediately adjust the margin money (subsidy) received from KVIC to term loan account so that borrower can repay reduced loan amount?

Reply: The margin money (subsidy) received by the bank will kept in special term Deposit account for a period of three years at branch level in the name of the borrower. No interest will be paid on the deposit and no interest will be charged on loan disbursed to the corresponding amount of the deposit. The deposit amount will be returned to the borrower after 3 years if the loan is promptly repaid otherwise same will be adjusted to the loan outstanding.

12. Q: I have applied for PMEGP loan through a finance company. The agent has sent me the approval of loan in    PMEGP letter head. Now he is demanding deposit of money equivalent to my share of contribution to the project and three EMIs. Can I deposit the money with him?                                                                                                                      Reply: KVIC /KVIB /DIC have not engaged any private Party/Agency/ Middlemen/ Franchise etc for promoting or sanctioning of PMEGP Projects or any financial assistance under PMEGP Programme and any potential entrepreneurs / beneficiaries dealing with such agency shall be doing it at their risk and consequences. As per my knowledge you have to apply for loan online directly to KVIC on their portal. The loan will be approved by DLTFC and is finally sanctioned by the bank under their terms and conditions. Any money to be deposited towards your contribution, same shall be deposited in your bank account in the branch where you are availing loan. So be careful while dealing with third parties. KVIC also clarified that loan applicants dealing through third parties are doing so at their own risk.

13. Q: What will be the interest rate of pmegp for girls?

  Reply: Normal rate of interest is charged by banks to PMEGP loans as applicable to MSME loans. No special  concession on interest provided to women beneficiaries.

14. Q: Can I get loan under PMEGP schemes. I have done the all Poultry farming trainings. Sir I am eligible or not for this PMEGP schemes?

Reply:  The activities like Dairy, sheep/goat rearing,   piggery, poultry, etc. are not eligible for PMEGP loans. You may try with NABARD who extend loan support for livestock /animal husbandry development activities.

15. Q: I have applied for a loan of Rs.25 lakhs but but I am sactioned loan of only Rs.10 lakh. How can they reduce my  requirement?

Reply: The amount of credit limit approved will be on the basis ofthe total cost of the project (i.e Cost of equipment plus requirement of one cycle of working capital) less owner’s contribution to the project.

There are On-line Grievance Portal and a Grievance Cell  setup by the KVIC, HQ. The Grievance Cell will act upon the on-line complaints within 48 hours and direct the concerned State Officers to take necessary action. Applicant, if not satisfied with the recommendations of the Committee, can file grievance against such rejection to the GM, DIC or State Director, KVIC of the concerned State, whoever is senior.

16. Q: Is it necessary to utilize the full amount of loan to keep the margin money already credited to the bank?

Reply: The Banks will claim Margin Money (subsidy) on the basis of projections of Capital Expenditure and working capital component shown in the project report and sanction thereof. If the capital expenditure is not fully utilised, when the project is ready for commencement of production, the proportionate amount of subsidy will be refunded back to KVIC. Similarly, Working Capital component should be utilized in such a way that at one point of stage it should touch 100% limit of Cash Credit within three years of lock in period of Margin Money and not less than 75% utilization of the sanctioned limit. If it does not touch aforesaid limit, proportionate amount of the Margin Money (subsidy) is to be recovered by the Bank/Financial Institution and refunded to the KVIC at the end of the third year.

17. Q: My PMEGP Loan was approved for Rs.10 lakh for Paver Block project. I have taken suitable land on 30 years lease for the above purpose. But Bank Manager refused to release the loan as I do not own the land. Please guide.

Reply: There is no such restriction for granting any loan that the unit should be operated on a owned property. However, it is the discretion of the Bank Manager either to sanction or decline the loan based on viability of the unit assessed by him. Once again convince the manager to sanction the loan. If he is not agreeable to sanction the loan ask him to give the reason in writing  for declining the loan. If you are not satisfied with the reason given by the bank Manager, you may complain to Head Office of the bank/consumer court/RBI/Ministry of Finance (Banking Division) etc.

18. Q: I am eligible for subsidy of Rs.3.60 lakhs, but my bank has received only Rs.50000/-

Reply: The online claim form submitted by the bank will be automatically checked for the fulfillment of two conditions (i) the date of release of first installment is prior to the date of filing of Margin Money subsidy claim and (ii) the amount of first installment released is more than the Margin Money subsidy amount claimed.

The subsidy will be released by KVIC in one installment only. If the first installment is less than the margin money amount, the bank shall pay interest to KVIC on the difference (till such time loan amount becomes equal or exceeds margin money) between loan amounts released and margin money.

19. Q: How many days  preapproval  of DLTFC takes to reach the bank?
As per District Level Taskforce committee (DLTFC) procedure, it is expected that within 48 hours or two working days of receipt of application, the nodal officer of KVIC, State KVIB and DIC will interact with you (applicant) personally on telephone or personal meeting and confirm the receipt/ acceptance of the application for preliminary scrutiny. The nodal officer will do all the required correction in the application in consultation/cross checking with you and also provide hand holding to you at every stage. They will appraise the applications on same methodology as followed by Banks for approval of loan. The DLTFC Committee will consider each application and make its recommendation on-line. The decision of the DLTFC will be conveyed on-line to the District Implementing Agencies (KVIC/KVIB/DIC) within 3 working days of the meeting electronically. The concerned Agency will within 48 hours of the receipt of decision of DLTFC forward the recommended application to the concerned Banks. This entire process has to be completed within 45 days of receipt of application on line. There shall preferably be no interviews by the DLTFC, however, if considered necessary DLTFC may call the applicant for personal interaction/interview. If the DLTFC does not clear within 45 days, the Banks can appraise the projects on their own. In case of rejection, the reasons for rejection should be clearly conveyed to the applicant.

20.Q:sir plz suggest me any finance company provide this pmegp loan in online proces.
Reply: 27 public sector banks,RRBs, SIDBI, and State Level Task force approved co-operative banks and scheduled commercial banks are the institutions lend loan under PMEGP scheme. Do not approach any other financial institutions /agencies for PMEGP loan.

21. Q: Sir i want to start new business in manufacturing sector.i want 25 lakh. Loan.i dont have collateral.land or house.Pls suggest how ican apply anf get the loan And which schem is useful for me
Reply:Request the bank for CGTMSE guarantee for the loan released by the bank. If CGTMSE guarantee is taken for your loan, no collateral security or guarantees  required.

22. Q: Sir, I am from itanagar Arunachal Pradesh. Please its a humble request to you to help me figure out the scheme. As I can’t find any department regarding the Pmegp loan, there is no concerned authorities out here, and I’m really unable to do the presentation/project. Even though there is a branch visible on KVYC/PMEGPofficial website for Arunachal. Please help me out by providing some link or something so that I can approach. Thanking you
Reply: 27 public sector banks,RRBs, SIDBI, and State Level Task force approved co-operative banks and scheduled commercial banks are the institutions lend loan under PMEGP scheme. Do not approach any other financial institutions /agencies for PMEGP loan.You need not search for any authorities, apply for the loan through on-line to know more click the following link.

https://www.bankingschool.co.in/loans-and-advances/5316/

23.Q:is it mandatory to approve the project from CA for pmegp?
Reply: No need for a CA for preparing the project report. visit KVIC official website. you will get the readymade format for various types of projects.

24. Q:I am from Assam. We do not have Aaadhar in Assam yet. How can I apply Sir?
Reply :In case no Aadhaar number is available Pan Card of the individual/ Enterprise or operational Bank account number of the institution may be furnished.
For details click the following link
https://msme.gov.in/sites/default/files/letters_640670_2016-08-16_1722_0660_1.pdf

25. Q:Hello Sir. I am willing to start an gaming arena (family entertainment center) . Will this be approved under PMGEP scheme? Plz suggest.
reply; As per KVIC guidelines, PMEGP is applicable to all new viable micro ventures except activities indicated in the negative list of village industries.The proposed business does not come under negative list.

26. Q: Whether me and wife take PMEGP loan separateely.
Reply: Only one person from one family is eligible for obtaining financial assistance for setting up of projects under PMEGP. Family includes self and spouce.

Related article: “Bank finance under PMEGP scheme

Disclaimer: This article is only for general information. The scheme rules/guidelines may be changed by the Government from time to time. The clarifications or interpretations if any available from DIC, KVIC, KVIB are final. The author of this article is not responsible for the mistakes, errors, ambiguity, inconsistency, discrepancy, doubts or quality of information provided in this article.

(38) Comments

  1. Divya

    Sir under Regp loan scheme we observed that first disbursement is only 50000 for 360000 subsidy. So I want to know if the customer get the benefit of subsidy only after disbursement of Rs.360000. Till then the principal outstanding doesn't get affected by subsidy. Please clarify

    1. Surendra NaikSurendra Naik - Post author

      The online claim form submitted by the bank will be automatically checked for the fulfillment of two conditions (i) the date of release of first installment is priort to the date of filing of Margin Money subsidy claim and (ii) the amount of first installment released is more than the Margin Money subsidy amount claimed. The subsidy will be released by KVIC in one instalment only. Ifthe first installment is less than the margin money amount, the bank shall pay interest to KVIC on the difference (till such time loan amount becomes equal or exceeds margin money) between loan amounts released and margin money.

  2. Sushil palodkar

    Sir DIC has forwaded my proposal to bank on date 12 june . Till daate have complete all query but bank does not given me saction latter. After march they giving me saction latter after march then their is problem or not

    1. Surendra NaikSurendra Naik - Post author

      The loan is preapproved for the present financial year by DIC within the budgettary target. I'm not sure whether the bank can sanction loan in the next financial year based on the present approval. Please talk to DIC officials and express your difficulties.

  3. Bahiru N

    Hello Sir, I was applied PMEGP loan in July 2017 to set up new unit of Computerised Advertising, Printing & Publishing. After 4 months DLTFC Team approved it and forwarded to the bank. Bank also kept pending for 2 months as saying the application was not received or not able to view the application. After followup and complaining to PMEGP, Bank HO & PG Portal as per your guidance into your website. PMEGP official given reply to me that the Bank has kept pending this application and not seen yet. Again i lodge the complaint to the PG Portal and now the bank was taken my application in process. before 2-3 days the Dy. Manager has been inspected our projected unit and told me that they are sanction the loan only for the equipment and not able to finance for working capital. we can provide finance only for the computer set, not for the softwares included into the project report. Our all the work depends on the softwares and its cost around Rs. 5 - 6 lacks. I was already invested Rs. 3 lacks into unit premises Sec. Deposit, Rent (July 2017 - Jan 2018) & office infrastructure. As per the model project given on PMEGP website we made the same and also approved by DLTFC Team but now bank has refuse this model project report to do the finance such kind of things like working capital, wages, salaries & administrative expenses etc. What can i do now? Already this process wasted my lots of time? Please guide me what to do now? Thank you.

  4. Geethapriya D

    Sir,I the Geethapriya applied for personal loan.I working in private school as Teacher.I applied for personal loan of Rs.300000/-.Mr.Yesh verma is my agent ,he guided me & I have updated all my documents.He referred it & he told me now I am sending your application & documents to verification officer,from their you will be getting a verification call within one week.I was waiting,but no verification call came.Then again a got a call from verification officer, officer asked me is it Geethapriya, yes sir,that's all he disconnected the call.After everyday call Mr Yesh verma through phone call he also went on disconnecting,but suddenly one he received my call, I asked him,sir what happened.Mr yesh verma told,your loan Application is rejected, I asked him on what basis they have rejected.so he telling me there are two options only. 1) you have pay 30000. 2)or cancel it. So I replied, sir I don't have such huge amount.After one week he called me & said,I personally spoked to verification officer,no problem within 2 days you will be getting phone call from bank please don't disconnect the call.& Also he told,after your amount you get don't for get me sir, I am sending my bank account,you please deposit my amount without fail.Next day itself,he sent his bank a{c.but uptll now I have received any phone calls from bank side.But from past one week I am calling him he is not receiving the call.Now what Must I do

    1. Surendra NaikSurendra Naik - Post author

      As I have replied in the above post, to sanction or decline the loan is bank's discretion. KVIC or DIC don't have the power to sanction the loan, they can only preapprove the application for the purpose of releasing the subsidy if loan is released by the bank. As such if you have paid money to third party for the purpose, you are only responsible for the loss. You may lodge a Police complaint against the person who has collected money from you on the ground of cheating.

  5. Tushar D Patil

    Dear sir, My project under PMEGP scheme saction By DIC july 2017 then i m apply for loan ( 25 lac) to State bank of india. The bank manager visited our manufacturing site where the project was installed after loan saction in Oct. 2017 but still they not saction the loan. i am provided all document regarding the project then i am given action abaut brach manager & complaint to CP-gram. then the manager taken personally & he replies to cp-gram i m not able to this project & loan was not saction by SBI even he not open a single online application by DIC still also He noted three point 1) Applicant services another company as research and development sector ( my point is i am on temporery basis working & under the PMEGP scheme no rule abaut this point as per norms by PMEGP 2) very higher side to cope up with the competition ( I m set up this manufacturing unit around 30 lac but i m required only 25 lac but allready decided my bussiness was good) Tushar Patil 8698881225 watsaap

    1. Surendra NaikSurendra Naik - Post author

      DIC has preapproved your proposal. To sanction or reject the proposal on merit of the proposal is Bank's discretion. For more information, click below https://www.bankingschool.co.in/loans-and-advances/pmegp-frequently-asked-questions/

  6. Arnok Bhattacharya

    Sir, I want to start a tshirt manufacturing company, I'm 22 years of age. Am I eligible for the loan? Also what is the tenure for repayment of the loan?

    1. Surendra NaikSurendra Naik - Post author

      You are eligible for the loan. Repayment period will be decided by the bank on the basis of project report appraised. Usually term loan will be for the period of 3 years and working capital limit (Cash Credit/OD limit) may continue as long as you wish (provided the account should be regular).

  7. girdharee ompraksh bakoliya

    sir i stay in mumbai . i am studing in mumbai now i am last year b.com student .i have a small buisness in mumbai (civil contrector) but sir i want to do a manufactring plant of namkeen in my native place. this is new project can i apply pmegp loan?

  8. vtl

    sir my loan aproved by dltfc and forwaded to bank then bank reject my loan bank says to me no target sir now what i do can bank re aprove rejected loan

  9. yelamandarao

    Dear sir, myself k yelamandarao i have applied for PMEGP loan tent house it was sanctioned under DLTFC on june 2017 project cost is 5 lacks .From last 7 months onwards i am meeting SBI branch manajor&field officer they are not responding about my loan and dont giving proper reason now what i can do please give me suggesion.

  10. Vilas Laxman Ravanang

    hi sir how to apply for population certificate. censusindia.gov.in this website is access denied. any option for apply population certificate regards Vila's r

  11. Prasenjit

    Sir, What is Population Certificate? Who will issue Population Certificate for PMEGP Loan? Please give me a format of Population Certificate.

  12. Shashank Tyagi

    Hello, Sir, I am Shashank Tyagi from Ghaziabad UP.I have applied for PMEGP scheme for setting up uPVC door & window manufacturing unit in my village (Rural) and select the financing bank PNB(IFSC Code PUNB0768100) which is in my village.The DLTFC approve the project (23 lack) and forward the file to the branch. when I contacted the branch manager he told me that you should ask before applying for the loan because he doesn't have the authority of sanctioning loan above 12 lack. I requested him to talk with his superior as it is a government scheme and I will fulfill all the requirement (guaranty, mortgage etc). The Manager rejected the loan and not mentioned the real reason for rejection that he doesn't have the authority. Now I have few questions: 1- The reason given by the manager is right? or it's my fault that I should prior talk with him? 2-now can I change the bank? if yes from where and how? 3- How to use alternate bank option? 4- The DLTFC approve the project for 2017-18, if I didn't get the loan this financial year will it be forwarded to next year? In the end, Sir, I worked hard on this project and don't want to miss this opportunity please tell me what are the other option I have asap.

    1. Surendra NaikSurendra Naik - Post author

      The final sanction of project and release of loan is done at the level of concerned Bank. The Bank will appraise the projects and take their own credit decision on the basis of viability of each project. Bank has the discretion either to sanction/decline a loan. In case bank is declining your application, you may demand the bank to give the reason for declining in writing. If you feel the reason given by the bank is not a valid reason, you may complain the matter to the higher authorities of the bank, ministry, CEO of KVIC, CMDs of the concerned banks, RBI, etc.

  13. Pramod Kumar

    Sir I want to develop an education Android app and want to make business with that app so I can get loan from bank

    1. Surendra NaikSurendra Naik - Post author

      I don't have an idea of this line of business. First, approach the bank where you want to avail the loan and explain them about modus operandi of your business.

  14. Madan

    Sir i want to start new business in manufacturing sector.i want 25 lakh. Loan.i dont have collateral.land or house. Pls suggest how ican apply anf get the loan And which schem is useful for me

    1. Surendra NaikSurendra Naik - Post author

      Request the bank for CGTMSE guarantee for the loan released by the bank. If CGTMSE guarantee is taken for your loan, no collateral security or guarantees required.

    1. Surendra NaikSurendra Naik - Post author

      27 public sector banks, RRBs, SIDBI, and State Level Taskforce approved co-operative banks and scheduled commercial banks are the institutions lend loan under PMEGP scheme. Do not approach any other financial institutions/agencies for PMEGP loan.

  15. yuvaraja

    Hello sir, i would like to do agriculture business.In that i like to do coconut business, i need maximum loan to take coconut trees for lease around 3000 trees in pollachi,tamilnadu.But now i am in trichy, tamilnadu.I want loan under PMEGP if not in which scheme i can get.And EDP training will differns from each business or same.

  16. Karthi

    Hello sir, I have applied for PMEGP and I need to know about Each process I completed online application.. and a week after I submitted My application an authority called From kvic and Said that We will call you for interview.. I need to know about next steps after interview And further

  17. Pandu

    Final submission failed due to following reasons 1. Total project cost mentioned is too low Please soluve my problem

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