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This is a flagship programme of the MSME Department, Government of Tamil Nadu. This scheme aims to mitigate the unemployment problems of the socially and economically weaker section of the society. It is specifically designed for the educated and unemployed to become self - employed in their native places itself so as to prevent the mass migration from rural areas to urban areas due to unemployment.

This is achieved by financing these youths to set up Manufacturing / Service / Business enterprises. They are given loans along with subsidy assistance from the State Government for up to 25% of the project cost.

Benefits of the Unemployed Youth Employment Generation Programme – UYEGP

  • The scheme concentrates at District level selection of beneficiaries to ensure even distribution of the benefit to all districts
  • All beneficiaries are mandated to attend a 7 days Entrepreneur Development Programme (EDP) training
  • Wide network of banks & financial institutions to give immediate access to funds – nationalized banks, private banks and Tamil Nadu Industrial Cooperative Bank
  • Repayment period and moratorium periods for the loan fixed by the bank
  • CGTMSE covers loans of up to Rs.10 lakhs ensuring no collateral or security requirement from the applicant. The credit guarantee trust will ensure the requisite security norms for the banks or financial institutions.
  • General Manager of the concerned (DIC) District Industries Centre will arrange buyer-seller meets at regular intervals to provide marketing support.

Financial Assistance:

The financial assistance under this scheme includes Capital Expenditure loan, one cycle of working capital and 10% of project cost as own contribution in case of general category and 5% of project cost in case of special category loan.

Land and building cost cannot be included in the project cost.

Only new projects can avail this assistance


Project Cost



Bank Loan

General Category




SC / ST/ BC / MBC/Minorities / Women / Ex-Servicemen / Physically Challenged / Transgender




Who are eligible to apply for aid under the UYEGP Programme?


Only Individuals can apply for this loan 

Educational Qualification

Should have passed 8th Standard 

Age Limit

18 to 45 Years

18 to 35 Years (Other Community Men)

Family Annual Income

Should not exceed Rs.5,00,000/- 


Should have been a resident of Tamil Nadu for a minimum of 3 years and in the same area.

Maximum Project Cost 

Business: Rs. 5 Lakhs

Service: Rs. 5 Lakhs

Manufacturing: Rs. 10 Lakhs

What are the documents required to submit the application?

The application form should be duly filled and submitted to the District Industries Centre, concerned. The following documents should be attached along with the application form:

  • Transfer certificate/ Record Sheet issued by School/College (Two Copies)
  • Ration Card (Two Copies)
  • In case of applicants who don't possess valid Ration Card, a Nativity certificate from the Thasildhar / photocopy of Aadhaar card / photocopy of Election Voter’s ID card (Two Copies)
  • Project Report (Original & Duplicate)
  • Valid Quotations (Original & Duplicate) with GST number
  • Community Certificate (Two Copies)
  • Ex-Service man /Differently abled /Transgenders should apply with valid certificate (Two copies)
  • An Affidavit in the prescribed format which should be typed on a Rs.20/- Non-Judicial Stamp Paper, duly certified and signed by the Notary Public and then submitted along with a copy of Rental/Lease Agreement to the bank while sanctioning the loan.

How does the application process work for the UYEGP Scheme?

Applicants can apply the form online, take a print out of the filled application and submit it along with the required documents at the nearest DIC (District Industries Centre). They can also download an empty form, fill it up and submit it along with the documents.

The steps involved in the loan process under the UYEGP Scheme is given below: 

  • Filling UYEGP application by candidate
  • Verifying eligibility of online submitted application by DIC
  • Receiving call letter for attending interview
  • Participating in the interview
  • Recommendation of loan application to bank
  • Sanctions to be accorded by bank
  • Receiving the call letter for attending EDP training
  • Attending EDP training
  • Receiving EDP completion certificate
  • Submitting EDP Training Certificate and other documents as required to the Bank.
  • Loan disbursement by banks
  • Filing of subsidy claim by bank with DIC
  • Subsidy disbursement by DIC to the bank
  • The Bank deposits the subsidy amount under TDR for 3 years
  • After completion of 3 years, the subsidy will be adjusted in loan amount.


1. What other assistance is offered by the DIC towards the loan application process?

The UYEGP official website offers a Model project profile and Project template to guide the entrepreneur in preparation of Project Report.

2. What are the activities covered under the UYEGP Scheme?

All economically viable Services, Manufacturing and Business activities, excluding direct Agricultural operations like raising of crops, are eligible for aid under the scheme. The scheme applies to all cities in the Tamil Nadu including the rural and urban areas.

3. Which banks are covered under this scheme?

All Nationalized Banks, Private Sector Banks, Tamil Nadu Industrial Co-operative Bank

4. What is the quantum of loan amount?

Banks can sanction up to 90-95% loan of the project cost. This amount will include the Government Subsidy of 25%. Banks will first release the loan amount and then claim subsidy from the Government. The 25% subsidy on project cost from the Government shall not exceed Rs.1,25,000/-.

5. What is the rate of interest charged under the UYEGP scheme?

The rate of interest is as per RBI Guidelines.

6. What is the repayment tenure under the scheme?

Repayment tenure will be 5 years or as fixed by the bank in accordance with RBI guidelines.

7. Do I need to submit any collateral security under the scheme?

As per RBI guidelines, any project with costs up to Rs 10.00 lakhs under UYEGP are covered under CGTMSE. They don’t require any collateral security.

8. What is considered under the Project cost?

The financial assistance under this scheme includes Capital Expenditure loan, one cycle of working capital and 10% of project cost as own contribution in case of general category and 5% of project cost in case of special category loan. Land and building cost cannot be included in the project cost. Only new projects can avail this assistance.

9. Is the EDP Training compulsory to avail aid under this scheme?

Yes, attending the ED Training and submitting the training completion certificate is mandatory to avail the loan under this scheme.

10. Can existing MSME Units avail loan under this scheme?

No, only new MSME units can avail loan under this scheme

11. What should be the promoter’s contribution under the scheme?

The promoter should contribute at least 10% in case of General Category and at least 5% for Special Category (viz. Scheduled Caste / Scheduled Tribe / Backward Classes / Most Backward Classes / Minorities / Women / Ex-servicemen / Physically Challenged / Transgender)

12. Is there a lock in period for the government subsidy received from the bank?

Yes, the government subsidy has a lock in period of 3 years after which it shall be adjusted against the loan.

13. Can I get financial aid jointly from more than one bank or financial institution?

No, you can get assistance from one bank or financial institution only.

14. Can partnership firms apply for a loan under this scheme?

No, only individuals can apply for financial assistance under the UYEGP Scheme.

15. Can I get financial aid from UYEGP if I am already getting assistance from another Government Scheme?

No, you cannot get assistance from the UYEGP programme if you are already getting aid from another Government Scheme.

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