UYEGP 2026: 25% Subsidy on Loans up to ₹15 Lakh, Eligibility & How to Apply

At a glance

About the scheme

Introduced by the Micro, Small and Medium Enterprises Department of the Government of Tamil Nadu, the Unemployed Youth Employment Generation Programme (UYEGP) is designed to mitigate unemployment among socially and economically weaker sections. The initiative enables marginalized and educated youth to become self-employed by establishing new manufacturing, service, or trading ventures across rural and urban regions of the state. Beneficiaries receive institutional bank financing alongside a capital subsidy of up to 25%, making project startup capital accessible with lower promoter equity.

Benefits

• State government capital subsidy of 25% of the project cost, capped at a maximum of ₹2.50 Lakhs.
• Bank loan coverage ranging between 90% and 95% of the total project cost (including subsidy).
• No collateral security required for project costs up to ₹10 Lakhs as per Reserve Bank of India rules (eligible for CGTMSE coverage).
• Loan financing available up to ₹15 Lakhs for manufacturing units.
• Loan financing available up to ₹5 Lakhs for business and service enterprises.
• Repayment tenure of 5 years or as fixed by the financing bank under Reserve Bank of India guidance.
• Subsidy held in a Term Deposit Receipt (TDR) for 3 years and subsequently adjusted against the loan balance.

Who can apply (eligibility)

• The applicant must be a permanent resident of Tamil Nadu (resident for not less than 3 years).
• The minimum age of the applicant must be 18 years.
• The maximum age limit is 35 years for General category candidates.
• The maximum age limit is 45 years for Special categories (SC, ST, BC, MBC, Minorities, Women, Ex-Servicemen, Differently Abled, and Transgender).
• The applicant must have cleared at least the 8th standard.
• Total annual family income (including spouse) must not exceed ₹5,00,000.
• Promoter contribution must be 10% of the project cost for General category or 5% for Special category applicants.
• Completion of the Entrepreneurship Development Programme (EDP) training is mandatory.
• Only individual applicants setting up new enterprises are eligible.

Who cannot apply

• Direct agricultural activities such as raising crops are excluded.
• Existing business, service, or manufacturing units are not eligible.
• Partnership concerns or firms are not eligible (only individual candidates).
• Applicants who have already availed loans or subsidies under any other Central or State Government scheme are not eligible.
• Joint financing from two separate banking institutions or sources is not permitted.
• Costs incurred on land and building cannot be included in the project cost.

Documents required

• Identity proof (copy of Voter ID Card or Aadhaar Card)
• Copy of PAN Card
• Passport size photograph
• Income Certificate
• Educational qualification proof (two copies of Transfer Certificate or Record Sheet from School/College)
• Proof of age
• Caste or Community Certificate
• Ration Card (or Nativity Certificate from Tahsildar / copy of Aadhaar Card / Voter ID Card if Ration Card is unavailable)
• Detailed Project Report
• Valid quotation with GST number for machinery or equipment
• Special category certificate for Ex-Servicemen, Differently Abled, or Transgender applicants (if applicable)
• Bank account details
• Affidavit typed on a ₹20 Non-Judicial Stamp Paper signed and certified by a Notary Public, accompanied by a rental or lease agreement

How to apply

1. 1Visit the official portal of the Micro, Small and Medium Enterprises Department at msmeonline.tn.gov.in/uyegp.
2. 2On the home page, select Apply Online and choose New Application.
3. 3Register by submitting your name, date of birth, email address, Aadhaar number, and mobile number.
4. 4Sign in using your registered credentials and fill in all mandatory application details.
5. 5Upload the required supporting documents and submit the online application form.
6. 6Attend the verification and personal interview conducted by the District Task Force Committee upon receiving the call letter.
7. 7Complete the mandatory Entrepreneurship Development Programme (EDP) training once the loan is recommended by the committee.
8. 8Submit the EDP completion certificate and banking documents to the sanctioning bank branch to receive loan disbursement.

Frequently asked questions