Loan Disbursement Time Under PMEGP Falls To 27 Days: Government

New Delhi, Mar 13 (KNN) The average time taken for loan disbursement under the Prime Minister’s Employment Generation Programme (PMEGP) has been reduced to 27 days in FY 2025–26 from 42 days in FY 2023–24, the government informed the Lok Sabha.

Minister of State for MSME Shobha Karandlaje said the scheme is implemented through the Khadi and Village Industries Commission (KVIC) and is regularly reviewed to address delays in loan sanctioning and disbursement across the country.

Under PMEGP, financing banks sanction projects and release loans after assessing the viability of each proposal, the minister said. 

To ensure timely credit flow, the government holds State Level Bankers’ Meetings and District Level Bankers’ Meetings to review loan sanctions and disbursement.

In addition, State Level Monitoring Committees (SLMC) and District Level Monitoring Committees (DLMC) meet regularly to monitor implementation of the scheme.

The government also tracks key performance parameters through the online PMEGP portal, including bank-wise performance, application rejection rates and the reasons for rejection across states.

Steps to address structural bottlenecks

The ministry said several measures have been introduced to address structural issues such as bank appraisal delays, credit aversion and coordination gaps among implementing agencies.

These include regular high-level bankers’ meetings, monitoring through SLMC and DLMC mechanisms, and review of rejection reasons recorded by banks.

Certain grounds such as ‘out of service area’ and ‘target achieved’ have been removed as reasons for rejecting PMEGP applications, the government said.

To improve project quality, over 1,000 model Detailed Project Reports (DPRs) covering various industries have been made available on the PMEGP portal.

Banks are also participating in awareness and outreach programmes organised by implementing agencies to guide applicants and identify potential beneficiaries.

In addition, financial literacy camps and customer awareness programmes are being conducted to inform prospective entrepreneurs about government initiatives and access to credit.

(KNN Bureau)