## Policy Summary: Enhancing Credit Flow to PMEGP Beneficiaries in Rural Areas
**Issue:** This policy addresses the need to improve outreach, application processing time, and credit flow to beneficiaries of the Prime Minister's Employment Generation Programme (PMEGP), particularly in rural areas.
**Response:** The Ministry of Micro, Small and Medium Enterprises (MSME) has implemented several measures to address these challenges:
**Key Initiatives:**
* **Financial Incentives:** Rural beneficiaries receive higher subsidy rates and lower contribution requirements. 80% of PMEGP units have been assisted in rural areas.
* **Outreach Programs:** Awareness programs are being conducted across all States/UTs, focusing on backward and underperforming areas, Aspirational districts, and the Northeastern Region.
* **Accessibility:** PMEGP applications are accepted in 11 regional languages (excluding Hindi and English) to improve outreach in rural areas.
* **Training and Resources:** Free two-day online Entrepreneurship Development Programs (EDPs) are offered to prospective entrepreneurs. Over 1,000 Model Detailed Project Reports are available on the PMEGP online portal.
* **Expanded Scope:** The negative list has been modified to include activities such as dairy, poultry, aquaculture, and sericulture under Animal Husbandry.
* **Reduced Collateral Requirements:** Banks have been advised to waive collateral security for loans up to ₹10 lakh, as per RBI guidelines.
* **Process Tracking:** A dedicated portal tracks the application process from submission to subsidy adjustment, enhancing efficiency and transparency.
* **Monitoring and Coordination:** Review meetings are conducted at the Ministry, State, and zonal levels to ensure timely loan sanctioning and disbursement.
* **Technical Assistance:** Technical experts (retired bank officials) provide handholding support to prospective beneficiaries during the application stage.
* **Stakeholder Engagement:** Periodical review meetings are held with implementing agencies (KVIC, KVIBs, DICs, and financial institutions).
**Expected Impact:** These initiatives aim to improve the accessibility, efficiency, and effectiveness of the PMEGP scheme, leading to increased entrepreneurship and employment generation in rural areas.
Key Entities Referenced
StatesUTs: States and Union Territories of India
PMEGP: Prime Minister's Employment Generation Programme, a credit-linked subsidy programme.
Ministry of Micro, Small and Medium Enterprises: The Indian government ministry responsible for formulating and administering rules, regulations and laws relating to micro, small and medium enterprises in India.
Sushri Shobha Karandlaje: Minister of State for Micro, Small and Medium Enterprises.
RBI: Reserve Bank of India
Northeastern Region: The northeastern region of India
KVIC: Khadi and Village Industries Commission
State KVIBs: State Khadi and Village Industries Boards
State DICs: State District Industries Centres
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION No.4625
TO BE ANSWERED ON 21.08.2025
CREDIT FLOW TO PMEGP BENEFICIARIES
4625. SHRI K E PRAKASH:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) whether any special measures are being taken to improve outreach, application processing time
and credit flow to PMEGP beneficiaries in rural areas; and
(b) if so, the details of such initiatives and their expected impact?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a) and (b): Measures taken by Government to improve outreach, application processing time and
credit flow to beneficiaries, especially in rural areas under PMEGP include the following:
i. Under PMEGP, beneficiaries belonging to rural areas are covered under special category of
beneficiaries who are eligible for higher rate of subsidy and lower own contribution to the
project cost. Consequently, 80% of the total units have been assisted in rural areas.
ii. Awareness programmes in all the States/UTs including backward and under-performing areas,
Aspirational districts, Northeastern Region etc.
iii. Acceptance of PMEGP applications from beneficiaries in physical form in 11 regional
languages since January 2024 excluding Hindi and English i.e., Gujarati, Malayalam, Punjabi,
Manipuri, Bangla, Marathi, Tamil, Assamese, Kannada, Oriya and Telugu to improve outreach
especially in rural areas.
iv. Conduct of two-days free online Entrepreneurship Development Programme (EDP) for
prospective entrepreneurs.
v. A wide range of more than 1,000 Model Detailed Project Reports have been prepared on
various industries and made available on the PMEGP online portal to improve the quality of
project proposals.
vi. Negative List has been modified to allow more activities such as dairy, poultry, aquaculture,
insects (bees, sericulture, etc.) under Animal Husbandry to be permitted under the Scheme.
vii. Banks have been advised not to insist collateral security for projects involving loan up to 10
lakh as per RBI guidelines to improve credit flow to beneficiaries.
viii. A dedicated portal for tracking the complete process from application till adjustment of MM
subsidy into the beneficiary’s loan account to improve efficiency and transparency.
ix. Banker’s Review meetings conducted at Ministry, State and zonal level to ensure proper
sanctioning of loans without delays and disbursement of margin money.
x. Technical experts & Retired Bank Officials have been engaged to provide handholding support
to prospective PMEGP beneficiaries during application stage.
xi. Periodical review meetings with Implementing Agencies i.e. State offices of KVIC, State
KVIBs, State DICs and financial institutions to strengthen the implementation of the scheme.
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