Pradhan Mantri Formalisation of Micro Food Processing Enterprises

On 29th June 2020, the Ministry of Food Processing Industries launched the Pradhan Mantri Formalisation Of Micro Food Processing Enterprises (PMFME) scheme. The aim is to transform 2 lakh informal micro food processing enterprises into formal enterprises by providing credit-linked subsidies, technical assistance, and building common infrastructure. Entities like Farmer Producer Organisations (FPOs), Producers Cooperatives and Self Help Groups (SHGs), are the key beneficiaries.

Understanding this scheme can help micro businesses take advantage of government initiatives to scale-up their business.

The key features and benefits of the scheme are discussed here.

• Support to Groups: The scheme aims to provide assistance to different groups like the micro food processing entrepreneurs, SHGs, FPOs, and Co-operatives.

• Funding Support: Beneficiaries are expected to get a credit-linked capital subsidy of 35% of the eligible project cost, with a ₹10 Lakh limit in some cases. Each member of SHG is also eligible for ₹40,000 seed capital.

• Formalisation: The scheme aims for a formalisation of the 2 lakh selected beneficiaries, marking their entry into the organised sector.

• Branding and Marketing: Assistance is given for branding, packaging, marketing, and linking enterprises with organized retail supply chains, including an emphasis on One District One Product (ODOP) branding.

• Common Infrastructure: The scheme supports common facility building for services like sorting, grading, storage, packaging, cold storage, and laboratory.

Businesses have to meet certain criteria to take advantage of this scheme. Some of them are discussed below.

• Eligible Borrowers: The scheme is for FPOs, SHGs, co-operative and the existing micro food processing entrepreneurs. Individual or group new units get support only for ODOP.

• Eligibility for Individual Micro Units: Existing unincorporated micro food processing units with less than 10 workers, preferably involved in ODOP products, can participate. Applicants must own the enterprise, be over 18 years old, with at least an VIII (8th) standard education, etc. Only one beneficiary per family is allowed, and land cost is excluded from the project cost.

• Eligibility for FPOs or Co-operative: They should process ODOP produce with a minimum turnover of ₹1 Crore. The project cost should not exceed turnover, and members need at least 3 years of product experience. They should have internal resources or state government sanction to cover 10% project cost and margin money.

• Seed Capital: Only SHG members are eligible for seed capital funding. However, they must provide adequate information about the product and business. Moreover, the capital can be used for specific purposes like working capital, small equipment, etc.

Individuals can follow the steps below to apply for the PM FME scheme.

1. Register on the official PM FME portal by providing basic details like name, mobile number, beneficiary type, address, state, and district to create an applicant account

   Portal Link: https://pmfme.mofpi.gov.in/pmfme/#/Home-Page

2. Log in to the portal using the registered credentials and fill out the online application form with all required business and personal details.

3. Upload the documents required as guided by the portal.

4. After a review, submit the application. A Designated Resource Person (DRP) may be assigned for assistance and review.

5. The application status can be checked on the PM FME portal.

PM FME aims to equip 2 lakh micro units with technical assistance and credit. However, apart from government credit, several other credit sources exist today in India. Bajaj Markets, an online marketplace, has curated a list of over 10 lending partners offering diverse products meeting unique customer needs. Businesses can choose collateral free business loans of up to ₹80 Lakhs.