Project Report For PMEGP and Bank Loan

 

Preparing a project report for the Prime Minister’s Employment Generation Programme (PMEGP) is the most critical step in securing both the government subsidy (Margin Money) and the bank loan. Banks use this report to assess the technical and financial viability of your business.

Below is a comprehensive guide to the structure and requirements for a PMEGP-compliant project report.

 we need to look at the exact numbers and templates banks require. A PMEGP project report isn't just a description; it’s a financial simulation.

Here is a deeper dive into the specific financial ratios and the structure of a "Bank-Ready" report.

 

1. The Financial Golden Rules

When a bank officer opens your report, they immediately look for these three numbers. If these are wrong, the report is often rejected:

  • DSCR (Debt Service Coverage Ratio): This must be between 1.5 and 2.0.
    • Calculation: Annual Principal Repayment + InterestNet Profit + Depreciation + Interest on Loan​
    • If it’s below 1.25, the bank thinks you can't repay the loan. If it's above 3.0, your projections look "too good to be true."
  • Project Cost Breakup:
    • Capital Expenditure (Fixed): Machinery, tools, work-shed construction.
    • Working Capital (Cycle): Raw materials and operating costs for at least 1-3 months.
    • Note: You cannot include the cost of land in the PMEGP project cost.
  • Employment Ratio:
    • PMEGP is an employment scheme. You should generally show at least 1 employee for every ₹1–2 Lakhs of investment.

 

2. Standard Table of Contents for the Report

Your final PDF should be arranged in this order:

  1. Project Profile: Introduction, location, and why the product has demand.
  2. Bio-Data of Promoter: Your education, experience, and training (EDP) details.
  3. Market Potential: Who will buy your product? (e.g., local shops, wholesalers, online).
  4. Technical Aspects: * Installed Capacity (e.g., 500 units/day).
    • Utilized Capacity (e.g., 60% in Year 1, 70% in Year 2).
  5. Fixed Capital Investment: Table of machinery with current market prices.
  6. Operating Expenses: Monthly wages, electricity, and raw materials.
  7. Working Capital Requirement: The "Cash" you need to keep the business running daily.
  8. Financial Analysis (5-Year Projections):

 

3. Mandatory Documents Checklist (2025 Updates)

Ensure you have these digitized for the online application:

  • Aadhaar & PAN Card (Mandatory).
  • Highest Educational Certificate (8th pass is the minimum for loans >₹10L manufacturing / >₹5L service).
  • Project Report (Upload in PDF format, usually under 2MB).
  • Machinery Quotations (From a GST-registered vendor).
  • Rural Area Certificate (If applicable, to claim the 25–35% subsidy).
  • EDP Training Certificate (If already completed; otherwise, you can do it after the loan is sanctioned).

 

4. Where to get "Model" Reports?

KVIC provides pre-filled templates for over 100+ businesses (like Bakery, Tailoring, Dairy, etc.).

  • Action: Go to the KVIC Project Profiles Page and look for "View Model Project Reports."
  • Tip: Do not copy these exactly. Update the "Machinery Costs" and "Labor Wages" to reflect 2025 market rates in your specific city.

 

Pro-Tip: The "Lock-in" Period

Remember that the PMEGP subsidy (Margin Money) is kept in a Fixed Deposit (TDR) for 3 years. You cannot use this money immediately. The bank will adjust it against your loan only after 3 years and a physical verification of your unit.

Would you like me to help you calculate the specific loan and subsidy amounts for a certain project cost (e.g., a ₹15 Lakh project)?

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Location: India

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