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In India, several unemployed youths are in search of the loan at lucrative interest rates so that they can start their business ventures. However, procuring a loan from a private financial institution is a resilient task as it involves a lot of factors in getting the loan approved from a bank or any other financial institution. From document verification to check the credit score, banks investigate a lot of aspects before lending the loan. In such scenarios, government-backed loan schemes, specially designed for unemployed youths come into play. These schemes started by the government could help the people to give a start to their business ideas and thereby reduce unemployment. Here are some of the government loan schemes for unemployed youth in India :
Prime Minister Rozgar Yojana (PMRY)
Launched in 1993, Prime Minister 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 this scheme 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 the setting up of their business. It may be noted that the loan is composite and individuals can avail a credit of up to Rs. 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)
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 the unemployed youths by the state government. 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.
These kinds of loans are availed by farmers 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 Rs. 1 lakh require no security. Loans over Rs. 1 lakh may require security as per the lending banks terms and conditions.
The government of West Bengal has initiated this scheme. An unemployed person is eligible to apply for a loan amount of Rs. 50,000 under this scheme. The cash loan scheme aims to provide a platform for unemployed youths in India so that they can 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.
So, these are a few schemes initiated by the Government of India that could help an individual to start their business ventures at attractive offers and lucrative interest rates.