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Government Loans for Unemployed

Loan Schemes for Unemployed in India

Last Updated 23rd May 2022

  • Unemployed youth can take a loan to start their new business under various government loan schemes.
  • Popular Govt loan schemes are Prime Minister Rozgar Yojana, NEEDS Schemes, Cash Loans, Agriculture Loan, and secured loans.
  • The maximum loan that one can take under the PMRY scheme is ₹ 5 Lakh.
  • Individuals can also apply for secured loans like loan against securities upto a specified limit of the asset.
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Govt. Loan Schemes For Unemployed In India

Prime Minister Rozgar Yojana (PMRY)

Launched in 1993, Pradhan Mantri Rozgar Yojana (PMRY) aims to provide sustainable self-employment opportunities to ten lakh educated unemployed youth and women in India. Anyone who has received education till the 8th standard is eligible to apply for loans under Pradhan Mantri Rozgar Yojana to start his/her venture. The age limit to apply for the loan is 18-35 years. For the SC/SC category, women and differently-abled people, the age limit is extended to 40 years. Also, training is provided to the borrower for 15-20 days to ensure their business setting. It may be noted that the loan is composite and individuals can avail a credit of up to ₹ 5 Lakh for setting up their venture.

The following documents are required to apply for Prime Minister Rozgar Yojana :

  • EDP (Entrepreneurship Development Programme) Training Certificate
  • Driving License
  • Experience, Qualification and Technical Certificates
  • Proof of Date of Birth
  • Residence Proof for 3 years
  • Income certificate issued by MRO (Mandal Revenue Officer)

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.


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.

Cash Loans

The government of West Bengal has initiated this scheme. An unemployed person is eligible to apply for a loan amount of ₹ 50,000 under this scheme. The cash loan scheme aims to provide a platform for unemployed youths in India to start their business ventures without any hassle. Any individuals belonging to the 18-45 age groups can apply and avail the loan.

Secured Loans For Unemployed

Apart from the above-mentioned government-backed schemes, a potential entrepreneur can also apply for the Loan against Securities. However, in this process, the individual will have to pledge some asset against the loan availed from the lender. Here, the loan amount will depend directly on the value of the asset.

These are a few schemes initiated by the Indian Government that could help an individual start their business ventures at attractive offers and lucrative interest rates.


Can an unemployed person get a loan?

Banks, NBFCs and other such financial institutions have started offering short term instant loans to unemployed people with some conditions attached.

How can I get a quick loan with no job?

If you have a decent credit background or are willing to board a guarantor or co-applicant, you can even get a loan without a job. If you made regular repayments without a single default, the lenders might provide you secured loans as well.

What are the things I have to know before taking a loan for the unemployed?

The main thing you should keep in mind is to make necessary arrangements for timely payment once you get the loan. Failure in doing so could lead to substantial penalties that could even prevent further financial assistance from banks.

Is there a government loan scheme for the unemployed?

The Government has started Prime Minister Rozgar Yojana to minimise the issue of unemployment. This initiative aims to provide ten lakh-educated unemployed rural youth self-employment opportunities.

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