It is probably impossible for unemployed young people in the country to obtain a loan from a private financial institution. It should be noted that a large number of factors come into play when banks or any other NBFC must approve a loan. From documents guaranteeing security to credit score, banks are investigating many aspects before handing over a loan. However, the government has developed many programs to help people who want to start their career or use it for other purposes.
The government has rolled out all these programs to help the country’s unemployed youth and reduce poverty. That said, here are some government-guaranteed loan programs for unemployed youth in India:
Prime Minister :
This is one of many programs set up by the government to help unemployed young people obtain loans. Under this program, the Indian government offers loans to the unemployed to start their own projects, and anyone who has been educated until Standard 8 is applicable can apply for a loan under this program. It should be noted that the loan is of a composite nature and that individuals can benefit from a loan of up to 5 lakh for the creation of their business. In addition, only young people between the ages of 18 and 35 who are unemployed can apply for the loan. However, in this case, the income of the beneficiary and that of his parents should not exceed Rs 1,000,000 per year.
Loan Grant System:
Although not available in all states, the Tamil Nadu government has put in place a clever program for the unemployed, under which the 25 percent of the loan amount is subsidized by the government of State. Under the NEEDS program or the New Entrepreneur and Enterprise Program, the state government provides a 25% subsidy for any loan made by unemployed graduates.
Similar to the NEEDs program, it is also a state-funded initiative launched by the Government of West Bengal. Under this scheme, an unemployed person can apply for a loan of 50,000 rupees under this scheme. Like all the above measures, this has been put in place to help the unemployed to start their business. Anyone in the 18 to 45 age group can apply and receive the loan.
This is a very useful system for the unemployed in the agricultural sector. It is worth mentioning that the government has worked with many banks and financial institutions to provide agricultural loans to unemployed young people in the country. An unemployed agricultural graduate, 22 years of age or older, may apply for the loan under this program.
Guaranteed Loans for the Unemployed:
This is another way for the country’s unemployed to obtain secured loans. However, as part of this process, the person will have to commit an asset to the lender for the loan to be sanctioned. Here, the loan amount will depend directly on the value of the asset.