Government loans for unemployed getting a loan is usually a tedious process, even for salaried individuals. Several factors are taken into consideration: like your credit
score, company history, and past payslips while appraising a loan application. Therefore,
the Government of India has introduced several loan and subsidy schemes to
support the educated unemployed youth of India by providing funding options to
help them start-up their own business.
The Government of India has been implementing the Prime Minister
Rozgar Yojana scheme since the year 1993 (the period of the 8th
five-year plan) with a focus on the creation and provision of sustainable
self-employment options to educated but unemployed youth of the country. It
relates to the setting up of self-employment ventures in the manufacturing,
business, service or trade sector.
1. Prime Ministers
Rozgar Yojana (PMRY)
The Prime Minister’s Rozgar Yojana (PMRY) is designed to create
self-employment opportunities that are sustainable to 1 million unemployed
youth who are educated. The scheme provides funding assistance for economically
viable activities that are inclusive of agricultural and allied activities (except
direct agricultural operations such as crop raising, manure purchase, etc.
Eligibility
Criteria
There are certain eligibility criteria that you must confirm if you wish
to apply for this scheme. Over the years, there have been a lot of
modifications in the eligibility criteria so that the scheme remains in tune
with the requirements of the present day.
Documents required
- Proof of your date of birth such as your birth
certificate, SSC certificate or TC from school where you studied. - Proof of residence for 3 years, ration card, or any other
documents which provides a proof of your residency. - Income certificate issued by MRO (Mandal Revenue
Officer). - Qualification, experience, and technical certificates.
- Driving license.
- EDP training certificate
- A copy of the proposed project profile.
How to Apply for a
PMRY Loan
- Once the project idea is finalised, the applicant is
required to fill up a form and submit it by enclosing the relevant documents
and photographs. This will have to be submitted at the District Industries
Centre (DIC) or the bank from where the loan is sought. - All applications are reviewed, and the selected
candidates are invited for an interview. The interviews are usually conducted
at main places in all districts. - In case eligible candidates are unable to avail the
benefits of the scheme due to lack of awareness, the procedures are explained
in detail by the DICs or local banks. - It is possible to apply for a loan under PMRY at any time
during the year. However, it is advisable to apply between the months of April
and June. - There will be three PMRY interviews in a year in all
districts. The Task Force Committee is responsible for conducting the
interviews and selecting eligible applicants for the loan.
2. Cash Loans
Similar to the NEEDs
scheme, this is also a state-funded initiative and has been kickstarted by the
government of West Bengal. Under the scheme, an unemployed person can apply for
a loan of Rs 50,000 under the scheme. Like all the above measures, this has
been started to help unemployed individuals kick off their business ventures.
Any individuals belonging to the 18-45 age groups can apply and avail the loan.
3. Loan subsidy for
unemployed
Tamil Nadu government has a scheme for the unemployed called NEEDS(New
Entrepreneur and Enterprise Development scheme).Under this scheme the state
government provides 25% subsidy for loans for unemployed youth who are
graduates.Collateral for the loan through banks is decided by the bank. The
project estimate is between Rs.5 lakh and Rs.1 crore and the infrastructure
cost of the project can’t exceed 25% of the loan.
Eligibility
Condition
8th Standard Pass, 18 years of age and not exceeding 35 years for
general category and 45 years for special category (SC/ST/BC/MBC/Ex-servicemen)
Procedure to obtain
the benefit/Service
Under the scheme, loans up to Rs.10 lakh would be given for
manufacturing activity up to Rs.3 lakh for service activity and up to Rs. 1
lakh for business activities through all nationalized banks and private sector
banks. For the beneficiaries under this scheme subsidy of Rs.25% of the project
cost not exceeding Rs. 1.25 lakhs.
The aspiring entrepreneur may apply in online through the web site
address http://www.msmeonline.tn.gov.in/uyegp/ or contact the General Manager,
District Industries Centre, SIDCO Indl Estate, Krishnagiri for further
assistance and other details.
Beneficiary
8th Standard Pass, 18 years of age and not exceeding 35 years for
general category and 45 years for special category (SC/ST/BC/MBC/Ex-servicemen)
Benefits
Under the scheme, loans up to Rs.10 lakh would be given for
manufacturing activity up to Rs.3 lakh for service activity and up to Rs. 1
lakh for business activities through all nationalized banks and private sector
banks. For the beneficiaries under this scheme subsidy of Rs.25% of the project
cost not exceeding Rs. 1.25 lakhs.
4. NEEDS Scheme
The New
Entrepreneur cum Enterprise Development Scheme (NEEDS) is a scheme initiated by
the Directorate of Industries and Commerce, Government of Tamil Nadu. Under
this scheme, a subsidy to the tune of 25% of the loan amount is granted to
state government’s unemployed youths. The age limit to apply for a loan under
this scheme is 21-35 years. The age limit is extended to 45 years for people
under SC/ST category, women, ex-servicemen, and differently-abled people. Plus,
the entrepreneur must hold a degree, diploma, or vocational training from a
recognized institution.
NEEDS scheme eligibility criteria
- Age Criteria: All
entrepreneurs within the age of 21 to 35 are eligible under the General
Category. The Special Category has an eligible category like entrepreneurs
within the age of 21 to 45 who are also Women, SC, ST, BC, MBC, Minorities,
Ex-Servicemen, Transgenders or Differently abled persons. - Academic Qualification: The entrepreneur must hold a Degree, Diploma,
ITI or Vocational Training from a recognized Institution. - Place of Residence: The entrepreneur should be a resident of Tamil
Nadu for not less than 3 years. - Business Entity: Entrepreneurs
starting their business as a proprietorship or partnership are eligible for the
subsidy under the NEEDS Scheme. Also, the business should be a new business. - Collateral Security: Collateral security will be decided as per
Bank or Tamil Nadu Industrial Investment Corporation Limited (TlIC) guidelines.
Loans may also be covered under Credit Guarantee Fund Trust Scheme for
Micro and Small Enterprises (CGTMSE) Scheme.
Subsidy provided under the NEEDS Scheme
A subsidy to the tune
of 25% of the project cost not exceeding Rs.25.00 lakhs is provided under the
NEEDS Scheme. For projects costing more than Rs. 1.00 Crore, the subsidy
component restricts to Rs. 25.00 lakhs. The project cost includes capital
expenditure and margin money for working capital. Cost of rented or leased
building, technical know-how, preliminary or pre-operative expenses and working
capital margin will not be subsidized. Of the total project cost, promoter
contribution must be more than 10% of the Project Cost for general category
entrepreneurs and 5% of the project cost in case of special category
entrepreneurs (BC, MBC, DNC, SC, ST, Women, Minorities, Ex-Servicemen,
Transgenders or Differently abled Entrepreneurs).
In addition to the
above 25% subsidy, an interest subsidy to the tune of 3% is also provided under
the NEEDS Scheme. For enterprises financed by Tamil Nadu Industrial Investment
Corporation (TIIC), the loan extends with a 3% rebate and the interest rebate
of 3% reimburses to TIIC on a quarterly basis. For loans extended by commercial
banks, the 3% interest subsidy provides a back-ended interest subsidy on a
quarterly basis during the entire repayment period.
5. Agriculture Loan
This is a very useful
scheme for those unemployed individuals engaged in the agricultural sector. It
is worth mentioning that the government has collaborated with many banks and
financial institutions to provide agricultural loans to unemployed youths in
the country. An unemployed agricultural sector graduate, aged 22 or above, can
apply for the loan under the scheme.
Farmers avail these
kinds of loans to fund season agricultural operations or related activities
like the purchase of land or farming tools. Agricultural loans are available to
all types of farmers, including small and marginal farmers, tenant farmers, sharecroppers,
etc. The government has collaborated with banks and financial institutions to
provide agricultural loans to unemployed youths in the country who are
unemployed agricultural sector graduates, aged 22 or above. Banks have relaxed
security or collateral for agricultural loans to encourage institutional
borrowing among farmers. As per RBI directive, crop loans till an amount of ₹ 1
Lakh require no security. Loans over ₹ 1 Lakh may require security as per the
lending banks terms and conditions.
Eligibility
Criteria for an Agriculture Loan
The
generalised eligibility criteria, however, are as follows:
- The applicant will have to be between the ages of 18
years and 70 years. - The individuals will have to own the necessary assets,
which will need to be hypothecated to the bank once the loan is borrowed. - Loans can be applied on an individual basis or joint
basis, based on the lender’s terms and conditions.