Tamil Nadu is making India climb the business hierarchy across the world by holding up to the first five positions in various industries. Business opportunities are abundant in Tamil Nadu, especially in the segment of micro, small, and medium enterprises department (MSME). The MSME in India is indeed the chief source of employment in rural India. Its contribution to GDP is over 40%, and it attracts many young entrepreneurs to start their own new business.
UYEGP – Unemployed Youth Employment Generation Program
The state government of Tamil Nadu has introduced a scheme targeted at the socially and economically weaker section of the society who are facing unemployment problems. The Unemployed Youth Employment Generation Program or UYEGP provides employment, particularly to educated and unemployed individuals. These are people who want to be self-employed by staying in their native places and do not want to migrate from rural to urban areas for employment purposes or for setting up any business.
The Scheme Overview
UYEGP, to prevent mass migration from rural to urban areas for finding employment, is providing help by setting up small scale manufacturing or service or business enterprises with the availability of small scale business loans in Tamil Nadu available up to a maximum of Rs.10 lacs for manufacturing units, Rs. 3 lacs for the service industry and Rs. 1 lac for small business enterprises. These loans are available with a subsidy from the state government of Tamil Nadu, up to 25% of the project cost or maximum of Rs. 1.25 lacs.
Benefits of taking Business Loans in Tamil Nadu
Since Tamil Nadu is emerging as one of the key hubs for MSMEs and thereby for employment, there are a few benefits of taking Business Loans in Tamil Nadu.
- Limited unemployment – Though the literacy rate of Tamil Nadu is 80%, not all of the educated people get good jobs. Instead, it would be good to invest a small amount and start a business than waiting for a job or migrating elsewhere for work.
- Business environment – Tamil Nadu is a vast state with many cities offering extensive business opportunities. Thus, it would be highly beneficial to get Business Loans in Tamil Nadu as it has an encouraging business climate and is friendly to entrepreneurs.
- Numerous Schemes – Tamil Nadu government has announced multiple loan schemes and thus created a platform for healthy competition among banks and private loan providers. Therefore, an individual gets a lot of choice between interest rates and various banks who offer them for availing a loan and expanding the business.
- Ample opportunities – Tamil Nadu is known for several businesses. From agriculture, electronics, automobile, textile, transport, food processing, education, paper, and leather, name any industry, you’ll find it in Tamil Nadu. It allows a lot of choices for an individual to pick any industry and start a business with minimum investment with a small scale business loan in Tamil Nadu. Moreover, one can grow in a particular business and then go for diversification.
Eligibility criteria for Tamil Nadu government loan scheme for small business
Any educated individual who dreams of becoming an entrepreneur can apply for a loan. Every business enterprise right from a proprietary firm to a limited company or a partnership firm and even a self-employed person can apply for small scale business loan from the Tamil Nadu government. However, there are a few essential eligibility criteria for small Business Loans in Tamil Nadu, which remain the same and are tabulated below –
Eligibility Criteria of UYEGP scheme 2020
Eligibility Criteria of UYEGP scheme – 2020
Minimum Applicant Age
Maximum Applicant Age
35 Years (For General Category Candidate)
45 Years (For Special Category Candidate)
Minimum Educational Qualification
Passed – Standard 8 or above
Maximum Family Income
Rs. 5 Lakh (The family income includes the applicant’s as well as the spouse’s income)
Criteria for Residence
The applicant must be residing in the state of Tamil Nadu for not less than last 3 years
Profile of the Applicant
Only an Individual applicant can apply. Partnership applicants are not allowed.
Any Previous Loan
In case if the applicant has used any loan or benefit for any other project in the past, then he/she will not be eligible for loans under UYEGP
Financial Structure of Tamil Nadu Government Loan Scheme for Small Business
The scheme is a right mix of subsidy with a generous bank loan for young applicants of the state of Tamil Nadu. Below are the tabulated details of the UYEGP scheme’s financial structure of the total cost of the project.
Applicant of the General Category
90% amount of the cost of the project
25% of the total cost of the project
Applicant of the Special Category
95% amount of the cost of the project
25% of the total cost of the project
The Special Category of the applicants belong to the following:
- Scheduled Castes
- Scheduled Tribes
- Backward Classes
- Most Backward Classes
- The Minorities
- Physically Challenged
The loan, along with the subsidy, is disbursed jointly by the bank and the bank can further claim the amount of grant from the Tamil Nadu Government.
Features and Benefits of UYEGP scheme
Following are the features and benefits of the UYEGP scheme by the state government of Tamil Nadu –
- UYEGP scheme offers the rate of interest as per the RBI guidance
- The selection of beneficiaries is done on the district level as participation from every district of the state can be encouraged
- All the beneficiaries to the UYEGP scheme are given training under the program named Seven Days Entrepreneur Development Program (EDP)
- An individual has the freedom to borrow from any financial institution from any of the nationalized bank or private banks or Tamil Nadu industrial Co-operative bank
- The bank provides a convenient plan for the repayment of the loan
- The applicant does not require any security or collateral. The credit guarantee trust looks after the requisite norms of protection for banks or other financial institutions
- The beneficiaries of the UYEGP scheme provide marketing support by District Industries Centre (DIC) which also arranges buyer-seller meets at regular intervals
- The applicant can avail loans from any scheme with the cost of the project of Rs. 10 lakhs in the manufacturing sector, Rs. 3 lakhs in the service sector and Rs. 1 lakh in the business sector.
How to apply for Tamil Nadu Government Loan Scheme for Small Business?
To apply for Business Loans in Tamil Nadu, one can follow the steps below-
- The form can be downloaded by the applicant from the website – https://msmeonline.tn.gov.in/uyegp/index.php or click on the ‘Apply Online’ option on the home page of the website
- Fill the application form
- Collect all necessary documents which are enlisted in the application form.
- Submit the filled application to the General Manager of District Industries Centre either by post or in-person
- The applicant can also submit the application online.
Documents required for Tamil Nadu Government Business Loans
The following is the list of documents required for Tamil Nadu Government Business Loans –
1. A duly filled application form
2. A Quotation or details of the assets needed in the project
3. The applicant’s certificate of educational qualification
4. A Project report
5. Proof of Residence (Aadhar card, Pan card, Electricity bill, Landline phone bill, and so on)
6. Certificate of the caste (if applicable)7. Certificate of Differently – abled (If applicable)