Starting your own business has never been easier in Uttar Pradesh. The Mukhyamantri Yuva Udyami Yojana is giving a big push to young people who want to become entrepreneurs. Under this scheme, you can get a loan of up to Rs. 4.5 lakh without paying any interest for 4 years. Even if you have just studied till Class 8, you can apply for it. The government wants to help the youth become self-dependent and job creators.
But to get this loan, there are a few important things to know—like how much CIBIL score is needed, how the application works, and what margin money you need to contribute.
Let’s understand this scheme in simple terms.
The Main Idea Behind the UP Yuva Udyami Yojana
The UP government has launched this scheme to support the state’s youth in becoming entrepreneurs. Instead of running after jobs, young people can now start their own work with government support.
This scheme is specially made for those who want to do something on their own but don’t have enough money. With over 200 types of small industries to choose from, youth can start anything from a masala grinding unit to making herbal products. Many people are already running successful businesses through this scheme.
Who Can Apply and What Are the Benefits?
- Anyone above 18 years of age, who is at least 8th pass, can apply.
- Loans are given up to Rs. 5 lakh for starting a new project.
- Government covers up to 90% of the project cost.
- No interest is charged on the loan for the first 4 years.
- No EMI has to be paid for the first 6 months.
- You also don’t need any job or employment to apply.
This means even if you are not highly educated or don’t have a job, you still have the chance to start a small business with government help.
How Much Loan Can You Get?
The scheme has two phases:
- First Phase:
You can apply for a project of up to Rs. 5 lakh. The government will give up to 90% of this amount as an interest-free loan. - Second Phase:
If you repay the first loan successfully, you can apply for another loan of up to Rs. 10 lakh in the second phase.
What is Margin Money?
Even though the government is giving up to 90% of the project amount, you still need to arrange a small portion of the money on your own. This is called margin money.
Margin money depends on your category:
- SC/ST, Women, Divyang (Disabled), and youth from special districts: Only 10% of the project cost.
- OBC Category: 12.5%
- General Category: 15%
Example:
If your project cost is Rs. 5 lakh:
- A general category applicant will need to arrange Rs. 75,000.
- An OBC applicant will need Rs. 62,500.
- SC/ST, Divyang, and women from selected districts will only need Rs. 50,000. The rest will be given as a loan, and you won’t have to pay any interest on that for four years.
What About the CIBIL Score?
A CIBIL score is a number that shows your credit history. It tells banks if you have paid your previous loans or credit card bills on time.
In this scheme, the CIBIL score is very important. Banks will approve or reject your application based on it.
- If you have never taken a loan or have defaulted earlier, your application may get rejected.
- To increase your chances, your CIBIL score should be above 670.
So, before applying, check your CIBIL score. If it’s low, try to improve it first.
How to Improve Your CIBIL Score Before Applying
If your CIBIL score is low, here are a few steps you can take:
- Pay any pending EMIs or credit card bills.
- Do not apply for multiple loans at once.
- Avoid taking too much credit at one time.
- Maintain a good repayment record for a few months before applying.
This will improve your credit history and increase your chance of getting the loan under the scheme.
Where to Get the Loan?
Many national and private banks are part of this scheme. These include:
- State Bank of India (SBI)
- Punjab & Sindh Bank
- Punjab National Bank (PNB)
- HDFC Bank
- ICICI Bank
- Kotak Mahindra Bank
- Axis Bank
- Bandhan Bank
You can apply through any of these banks based on your location and convenience. The banks will verify your documents, CIBIL score, and business plan before approving your loan.
What Kind of Work Can You Start?
The scheme allows you to choose from more than 200 types of businesses. Some examples include:
- Setting up a spice (masala) grinding unit
- Manufacturing herbal toothpaste
- Opening a mobile repair shop
- Starting a small garment business
- Food processing and packaging
- Candle or soap making
- Repairing and maintenance services
- Local delivery services
The aim is to promote local entrepreneurship and support small-scale industries that can grow with minimal investment.
Skill Training is Mandatory
Before you get the loan, you must complete training related to the work you want to start. This is to ensure you have the right knowledge to run your business successfully.
The training is generally provided by government-approved institutions or skill development centres in UP.
You will receive a certificate after completing the training, which you need to submit during the loan application.
Youth Leading the Way in UP
The scheme has already helped lakhs of youth across the state. Districts like Maharajganj have shown excellent results. It became the top-performing district, giving loans to more youth than targeted.
Districts like Ambedkar Nagar, Shravasti, Kannauj, and Rampur are also showing strong results with more and more youth starting their businesses.
The goal of the UP government is to help 10 lakh youth in 10 years through this scheme.
Step-by-Step Application Process
- Visit the official site or go to your nearest bank branch that supports the scheme.
- Fill out the application form with all the details.
- Attach required documents:
- Aadhaar card
- Educational certificate (minimum 8th pass)
- Caste certificate (if applicable)
- Training certificate
- Passport-size photos
- Project report or business plan
- Wait for bank verification.
- If approved, your loan will be sanctioned.
