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What is the UYEGP Scheme?

The Unemployed Youth Employment Generation Programme (UYEGP) is a flagship scheme introduced by the Micro, Small and Medium Enterprises Department of the Government of Tamil Nadu.

Through UYEGP, the TN government aims to reduce employment by facilitating financing solutions to promote self-employment. This would also help prevent mass migration from rural to other areas to look for better income and tackle problems arising from unemployment.

Read on to know more about UYEGP, its benefits, objectives, UYEGP scheme details, and more.

What is the Objective of UYEGP?

The UYEGP scheme aims to tackle the problem of unemployment in the young population of the economically and socially weaker sections. The state government provides a subsidy over loans to unemployed youth to help them set up a self-employed enterprise. 

The subsidy provided by the state government generally amounts to 25% of the project cost of starting a manufacturing, services, or business enterprise.

Features of UYEGP Schemes

The following are some of the features of the UYEGP scheme:

  • The scheme provides assistance for loans that you can avail of from commercial banks

  • The loan amount may range from up to 90% to 95% of the cost of the project

  • The UYEGP interest rate is determined as per the repo rate fixed by the RBI 

  • The repayment tenure of the UYEGP loan scheme may go up to 5 years

  • The promoters contribute 10% and 5% of the loan if you belong to the Special and General Category, respectively

  • The key objective of the UYEGP scheme is to reduce unemployment among the economically and socially weaker sections

  • The maximum project cost for manufacturing, trading, and service projects may go up to ₹15 Lakhs, ₹5 Lakhs and ₹5 Lakhs, respectively 

  • The capital subsidy of the loan provided by the state government is 25% of the project cost

  • The lock-in period for the government subsidy is three years

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Interest Rate for UYEGP Scheme

The UYEGP interest rate depends on the repo rate set by the RBI. So, it may change depending on the RBI’s monetary policy decisions.

Benefits of the Unemployed Youth Employment Generation Programme

The following are some of the benefits that you stand to gain by availing of the Unemployed Youth Employment Generation Programme:

  • The scheme ensures an equitable distribution of benefits as the beneficiaries are selected from the district level

  • The government also imparts a 7-day training under the Entrepreneur Development Programme (EDP)

  • UYEGP loan scheme provides loans through financial institutions like public sector banks, private banks, and Tamil Nadu Industrial Cooperative Banks 

  • The repayment tenure of the loan is fixed by the bank

  • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) insures loans of up to ₹10 Lakhs so that applicants do not have to pledge a collateral

  • The District Industries Centre (DIC) arranges a buyer-seller meeting for the beneficiaries at regular intervals

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Financial Assistance Provided in UYEGP Scheme

The financial assistance provided under the UYEGP scheme includes a capital expenditure loan. The following is the breakup of the loan provided under the UYEGP scheme: 






Promoter’s Contribution

Bank Loan

General Category




Special Category




Eligibility Criteria for UYEGP Scheme

In order to avail of this facility, you need to fulfil the UYEGP scheme eligibility requirements listed below:

  • You should have cleared the 8th standard

  • You should be unemployed

  • You should not have availed of a loan or subsidy from other Govt. schemes (State or Central)

  • The annual income of the family should be under ₹5 Lakhs

  • Your age should be between 18-35, 45 if you are from special categories

  • You should be residing in Tamil Nadu

  • The project cost should be in accordance with the guideline, between ₹15 Lakhs to ₹5 Lakhs, depending on the project type

Documents Required for UYEGP Scheme

In addition to meeting the above eligibility requirements of the UYEGP scheme, you will need to submit the documents to the District Industries Centre (DIC) to enjoy the benefits:

  • Transfer Certificate (TC) issued by your school/college for education proof

  • Ration Card for nativity proof

  • Nativity certificate issued by Revenue Department, an Aadhaar card, or a Voter ID card, if you do not have a ration card

  • Quotation and Project Report

  • Community certificate

  • Certificate for ex-servicemen, differently abled, or transgenders

  • An Affidavit on a ₹20 stamp paper duly signed by a notary officer  

  • A copy of the rental/lease agreement to the bank

How to Apply for UYEGP Scheme

If you are eligible to apply for the UYEGP scheme, you can apply for it by following the steps mentioned below:

  • Visit the UYEGP portal

  • Click on the ‘Apply Now’ button

  • Verify your eligibility by DIC

  • Attend the interview upon receiving the call letter

  • Get a recommendation and sanction by the bank

  • Complete a 7-day EDP training after receiving the call letter

  • Receive the EDP training competition certificate

  • Submit the EDP certificate along with other relevant documentation to the bank

  • The bank will disburse the loan after verifying the submitted documents

  • The bank will file a claim for a subsidy with DIC

  • The bank will deposit the subsidy under TDR for three years

  • The subsidy will adjust with your loan amount after the lock-in period

FAQs About the UYEGP Scheme

Self-employed manufacturing, services and business enterprises are covered under the UYEGP Scheme.

Public sector, commercial banks, and industrial cooperative banks of the state are covered under this scheme.

The repayment tenure of the scheme is five years.

Yes, EDP training is compulsory to avail of the aid under UGYEP.

No, the financial aid from the scheme is only available to new Micro, Small, and Medium Enterprises.

Yes, the government subsidy has a lock-in period of 3 years which gets adjusted to your loan amount.

The promoter contribution is 5% and 10% for the Special and General Categories, respectively.

The loan amount that you can get under the UYEGP scheme ranges from ₹15 Lakhs to ₹5 Lakhs. 

No, if the project cost is under ₹10 Lakhs, you do not need any collateral as per the RBI guidelines.

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