Many people in the village run small businesses from their homes. They make and sell pickles, papaya, sandige, spices, bakery products, sweets, and other food items at home. Since they operate from home, this business is run on a small scale.
Here, most small businesses are unable to thrive due to lack of funds for machinery, packaging, licensing, branding and business expansion.
To strengthen these small businesses, the Central Government has launched the PMFME scheme. Its objective is to provide financial and technical support to small businesses. This scheme has been implemented with the aim of preparing small businesses for the larger market in a more organized manner.
This scheme provides various types of assistance to individual entrepreneurs, self-help groups, farmer producer organizations and cooperatives. Credit-linked capital subsidy up to 35% of the eligible project cost is provided to individual or group micro food processing units. Financial assistance up to a maximum limit of Rs 10 lakh is provided per unit. In addition, assistance required for business improvement such as training, branding, marketing etc. is also provided.
What is the PMFME scheme?
PMFME, or Pradhan Mantri Micro Food Processing Enterprises Upgradation Scheme, is a scheme of the Ministry of Food Processing. It has been launched under the Atmanirbhar Bharat Abhiyan. Its primary objective is to strengthen small and unorganized food processing businesses and transform them into organized businesses.
It will help in starting new micro food processing businesses and upgrading existing businesses. Those who want to start or expand a small bakery, spice unit, pickle, papaya or other food processing business can avail the benefits of this scheme based on their eligibility.
Subsidy up to 35%, maximum Rs 10 lakh.
The key feature of this scheme is the credit-linked capital subsidy. Eligible individual or group micro food processing units can avail the benefit of up to 35% of the project cost. The maximum limit per unit is fixed at Rs 10 lakh. For example, if the eligible project cost is 20 lakh, then the 35% subsidy will be up to Rs 7 lakh.
If the eligible cost is 30 lakh, then the 35% amount will be 10.5 lakh. But since the maximum limit of the scheme is 10 lakh, the subsidy will be limited to Rs 10 lakh. This is not a direct cash payment. The capital subsidy is linked to a bank loan. Therefore, application, bank loan and eligibility requirements apply.
Training is provided along with loan and subsidy
PMFME also emphasizes on training and capacity building required to run businesses. Training is provided to food processing entrepreneurs to provide business and technical knowledge. Seed capital is also provided to self-help groups. Self-help groups engaged in food processing can be provided with seed capital of up to Rs. 40,000 per member for working capital and purchase of small equipment.
Business branding also helps
A major problem for small businesses is branding and marketing. Even if the products are top-rated, the problem of branding and marketing plagues them. Now pmfme provides branding and marketing support. This scheme emphasizes one district one product model. Its aim is to strengthen the entire procurement, processing, packaging and marketing system around the primary food product of the district.
This is how Sanjeet changed his life
The story of Sanjeet Kumar from Bhadauli village in Uttar Pradesh is an example of a successful small business. He used to run a small clothing shop in his village. With a low income, it was difficult to feed his family. A customer told him about the pmfme scheme. Then Sanjeet went to the industries department office, inquired about the scheme and applied. After availing the benefits of this scheme, he bought bakery machinery and started his business.
Now his bakery produces various products including burgers, biscuits, toast and bread. These are supplied to Sheikhupura and other parts of the country. As his business has grown, Sanjeet has employed 10 people. This shows that even a small business can grow into a job-creating business with the right government support, bank financing and business knowledge.