The government of India started this scheme after consultation with RBI in 1986 to enable adoption of self-employment by people of BPL families living in towns and cities with a population of more than 10,000 through the provision of grants and loans.
The main elements of this scheme are as follows:
- The person should be living in an urban area for the last 3 years.
- The person should not have any outstanding loan.
- 25 per cent of loan is given as a grant.
- No collateral or guarantee is needed for the loan.
- The person should be literate.