The loan process under Mission YUVA aims to provide financial assistance to entrepreneurs and Micro, Small, and Medium Enterprises (MSMEs).
Eligibility for Entrepreneurs Under Mission YUVA
1. Registered Enterprises:
These are businesses officially recognized and registered on the Udyam Portal, a government platform for formalizing Micro, Small, and Medium Enterprises (MSMEs).
2. Potential Entrepreneurs:
This category includes individuals with entrepreneurial potential, such as:
•Informal business operators.
•Skilled professionals lacking initial capital.
•Young, qualified, or unskilled eligible youth unfamiliar with formal business processes.
Eligibility Criteria for Potential Entrepreneurs:
Age: 18-39 years.
Education: Matriculate or higher.
Entrepreneurial Aspirations: Individuals with business ideas or those who have received entrepreneurship training.
Scope and Target Population:
1. Existing Entrepreneurs:
Owners of operational units in various sectors.
Enterprises registered as MSMEs or informal businesses.
2. Aspiring Entrepreneurs:
Individuals with innovative ideas looking to start businesses.
Those trained in entrepreneurship or skilled professionals seeking support.
Mission YUVA aims to bridge gaps in financial resources and knowledge, empowering these groups to succeed in the entrepreneurial ecosystem.
Here’s a detailed breakdown of the components, along with examples for better understanding:
1. Creation of Nano Enterprises and Collectives
Component I: Initial Investment Support
This component provides financial aid to set up new nano enterprises by dividing costs between the government, beneficiary, and bank.
For General Beneficiaries:
Government contribution: 25% of the project cost, up to a maximum of ₹1,00,000, released in two equal tranches (₹50,000 each).
Beneficiary contribution: 10% of the project cost.
Bank loan: 65% of the project cost.
Example: For a project with a total cost of ₹10,00,000:
Beneficiary pays ₹1,00,000.
Government provides ₹1,00,000.
Bank offers ₹8,00,000 as a loan.
For Women Entrepreneurs and Persons with Disabilities (PWD):
Government contribution: 30% of the project cost, up to a maximum of ₹1,00,000, released in two equal tranches (₹50,000 each).
Beneficiary contribution: 10% of the project cost.
Bank loan: 60% of the project cost.
Example: For a project costing ₹10,00,000:
Beneficiary pays ₹1,00,000.
Government provides ₹1,00,000.
Bank offers ₹6,00,000 as a loan.
Component II: Interest Subvention
This component reduces the burden of loan interest payments over time.
Subvention Rate: 6% per annum on loans for up to 5 years.
Maximum Benefit: Up to ₹50,000 over the 5-year period.
Early Repayment Benefit: If the loan is repaid early, the beneficiary receives the actual interest paid or ₹50,000, whichever is lower.
Example: If a ₹2,00,000 loan is taken at 10% interest, subvention reduces the effective interest rate to 4%. Over 5 years, the borrower saves ₹50,000.
2. Creation of New MSMEs in Focus and Sunrise Sectors
This component focuses on setting up MSMEs in key growth sectors by providing interest subvention and credit guarantees.
Interest Subvention:
Micro Enterprises: Loans up to ₹1 crore; interest subvention capped at ₹5 lakhs over 5 years.
Example: For a ₹50 lakh loan at 10% interest, subvention reduces the effective rate to 4%, saving ₹5 lakhs.
Small Enterprises: Loans between ₹1 crore and ₹10 crore; interest subvention capped at ₹30 lakhs.
Example: For a ₹5 crore loan, the enterprise saves ₹30 lakhs on interest over 5 years.
Medium Enterprises: Loans between ₹10 crore and ₹20 crore; interest subvention capped at ₹75 lakhs.
Example: A ₹15 crore loan qualifies for savings of ₹75 lakhs on interest.
Credit Guarantee:
New enterprises receive credit guarantee coverage under a unified credit guarantee fund, ensuring risk mitigation for banks and easier loan approval for entrepreneurs.
3. Business Acceleration of Existing Enterprises
This component supports already established businesses, helping them expand and improve operations.
Interest Subvention:
Rate: 6% per annum for loans.
Maximum Benefit: Up to ₹10 lakhs over 5 years.
Early Repayment Benefit: The actual interest paid or ₹10 lakhs (whichever is lower) is reimbursed upon early repayment.
Example: An established business takes a ₹20 lakh loan. The subvention reduces the effective interest rate, saving the business ₹10 lakhs over 5 years.
Credit Guarantee:
Similar to new enterprises, existing businesses receive credit guarantee coverage to secure loans, ensuring financial stability.
Mission YUVA offers comprehensive financial assistance through government contributions, reduced interest rates, and credit guarantees. This initiative encourages entrepreneurship, promotes economic development, and creates jobs across Jammu and Kashmir.
