As per the latest survey, more than 100 crore people in India are unemployed. This is one of the biggest concerns for a developing country like India. There are not enough job opportunities even for the educated youth of the country. To tackle this issue and promote entrepreneurship, the Indian Government has introduced various schemes and subsidies for the unemployed. Through these initiatives, the government financially supports unemployed people to start their dream business. If you are unemployed and passionate about starting a business, then this blog will surely help you.

Benefits of Choosing Government Schemes

Government-backed schemes are always the best option if you are considering a business loan. These schemes not only help the entrepreneurs but also help the country by creating more job opportunities and faster economic growth. 

The main reason why government schemes are best fit for the unemployed is their affordability. The majority of these schemes have really low interest rates compared to the private sector. In addition to lower interest rates, they also provide subsidies and other incentives. Another major advantage is that these loan schemes do not demand any collateral. These are unsecured business loans with flexible repayment tenure. In the long run, these benefits play a major role in increasing the chance of business success.

Top Government Business Loan Schemes for Unemployed Entrepreneurs in India

Below are two of the best government business loans for the unemployed in India:

  • Pradhan Mantri Rozgar Yojana (PMRY)

The Pradhan Mantri Rozgaar Yojana, popularly known as PMRY is a scheme launched by the government in India, especially to support the unemployed. The main objective of this scheme is to generate employment for the unemployed people of the country by providing financial support to start their businesses. The key features and eligibility and features of the scheme are:

Features:

  • No collateral is required for loans up to Rs. 1 lakhs.
  • Loan amount up to Rs. 5 lakhs for industrial sectors and Rs. 2 lakhs for business and service sectors.
  • The repayment period ranges between 3-7 years.
  • Interest rates depend on the location and financial institution providing the loan.
  • A subsidy of 15% of the project cost is provided, with a limit of Rs. 7,500 per entrepreneur.

Eligibility Criteria:

  • Only unemployed people can apply for this scheme.
  • The age of the applicant must be between 18 to 35 years of age. For SC/ST and women entrepreneurs, the limit is 45 years of age.
  • The overall monthly family income should be less than Rs. 40,000.
  • The minimum education qualification of the applicant should be 8th.
  • The applicant should not have availed any previous government-subsidized loans.

Documents required:

  • Passport-size photo of the applicant
  • Identity proof (Aadhar card, PAN card, or voter ID)
  • Address proof (utility bills orAadharr card)
  • Project report
  • Proof of residence for three years
  • Income certificate issued by MRO 
  • Caste certificate issued by MRO, if applicable
  • Proof of educational qualification

  • Prime Minister’s Employment Generation Programme (PMEGP)

The Prime Minister’s Employment Generation Programme is a credit-linked subsidy programme administered by the Ministry of Micro, Small, and Medium Enterprises (MSME) and managed by implemented by the Khadi and Village Industry Commission. This scheme aims at providing financial assistance to youths of urban and rural areas to start their own business. It is one of the best government business loans for the unemployed in India. The key features and eligibility and features of the scheme are:

Features:

  • Loan amount up to Rs. 25 lakhs for the manufacturing sector and up to Rs. 10 lakhs for business and service sector.
  • 15%-25% of the project cost is provided as subsidy depending on the location and category of the applicant.
  • The repayment period ranges between 3-7 years.

Eligibility Criteria:

  • Individuals, self-help groups (SHGs), institutions under the Societies Registration Act, production co-operative societies, and charitable trusts are eligible for this programme.
  • The applicant must be at least 18 years old.
  • No educational qualification requirement for a loan amount of Rs. 10 lakhs for manufacturing and Rs. 5 lakhs for the business and service sector.
  • The applicant should not have availed any previous government-subsidized loans.

Documents required:

  • Passport-size photo of the applicant
  • Identity proof (Aadhar card, PAN card, or voter ID)
  • Address proof (utility bills orAadharr card)
  • Project report
  • Special Category Certificate (if applicable)
  • Rural Area Certificate

How can we help you?

In the above list, we saw that a Business plan/project report is a crucial document when applying for a bank loan. The bank uses this document to analyze the overall feasibility, risks, financial viability, and potential of a project. A well-crafted and convincing project report increases the chances of loan approval.

With Finline you can craft a compelling project report in less than 10 minutes, that too in your language. All public and private sector banks working in India accept our reports. Click to create your project report.