All You Need to Know about PMRY Loans

The Pradhan Mantri Rozgar Yojana (PMRY), launched in 1993, is a central government initiative designed to create self-employment opportunities.

If you’re educated but unable to find employment, you can get subsidised financial assistance to start a business venture, provided you fall in the age group of 18-40 years.

Under the PMRY scheme, you can get funding for starting a business in the service, trading, and manufacturing sectors. You can also get financial support for launching agricultural projects. However, the project must not involve any direct agricultural operations like manure purchase, raising crops, etc.,

Here’s all you need to know about a PMRY loan.

Salient features of loans under PMRY

The following are the key features of the loan:

• Repayment: You can repay the loan in Equated Monthly Instalments (EMIs) within a tenure ranging from 3 to 7 years after the initial period (as specified by the financing institution) is over.
• Project cost: The loans under the scheme will only cover project costs of Rs. 5 lakhs for the industry sector and service sector and of Rs. 2 lakhs for the business sector.
• Subsidy: You’ll get a subsidy of 15% of the total project cost with a cap of Rs. 12,500 per entrepreneur.
• Collateral: You don’t need to pledge any collaterals for a loan of up to Rs. 1 lakh under the scheme. In partnership projects, each person involved in the partnership will only be allowed to borrow a loan of Rs. 1 lakh or less without collateral.
• Margin money: Since it varies across different lenders, it can be unique for each applicant. You, as a borrower, may be required to pay margin money that falls in the range of 5% to 16.25% of the project cost (the total of margin money and subsidy must be around 20% of the project’s cost).
• Training: You must undergo training for a period of 15 to 20 days to learn how to set up a business successfully. For the service and business sectors, the training period is 7 to 10 days.

Additional Read: New Business Loan Schemes for SMEs

How to apply for a loan under PMRY?

Step I: Download the loan application form by clicking here or visiting the official PMRY website. You can also collect the application form offline.

Step II: After finalising the project concept and checking your business loan eligibility, fill out the form with relevant information.

Step III: Submit the form at the District Industries Center (DIC) or the local lending institute that comes under the PMRY scheme. You also need to submit the necessary documents and photographs.

After submission, the respective lender will contact you after reviewing your loan application.

Additional Read:  How to Submit Your Business Loan Documents like a Pro and Get Them Approved?

To sum up

If you’re looking to secure some funds to grow your enterprise, there is no place better than Tata Capital. Avail of a multi-purpose business loan with a flexible loan tenure for up to 36 months. With relaxed eligibility conditions and simple documentation, you can expect swift processing without any collaterals!

You can also apply for a loan amount of up to Rs. 75 lakhs with competitive business loan interest ratesstarting at just 19%.