UP's CM Yuva Scheme: ₹15 Lakh Startup Loan Without Interest or Collateral | Explained

Finance influencer CA Sarthak Ahuja shares an important opportunity that many young Indians are still unaware of: several state governments across India are now offering interest‑free loans of up to ₹15 lakh to help individuals aged 18 to 40 start their own businesses. These schemes aim to boost entrepreneurship, job creation, and local economic growth, and they come with surprisingly simple terms.

A New Push for Youth Entrepreneurship:

Across multiple states, governments have introduced youth‑focused financing schemes where eligible individuals can receive capital to start ventures across services, manufacturing, franchising, and other categories. One of the most substantial examples is the CM Yuva Scheme launched by the Uttar Pradesh government.

Under this programme, UP allocated ₹1000 crore in the previous financial year alone, aiming to support 1 lakh entrepreneurs every year. Over a decade, this translates to nearly 10 lakh new youth-led enterprises across the state.

As of January 2026, the government has already disbursed ₹100 crore among 2,500+ applicants, signalling active implementation and steady uptake.

Loan Structure: Zero Interest, No Collateral

The CM Yuva Scheme provides funding in two phases:
Phase 1: Up to ₹5 lakh
Phase 2: Up to ₹10 lakh

What stands out is that these loans are completely interest‑free, banks are instructed to charge no interest, and no collateral or security is required.

Entrepreneurs must contribute around 10% of the project cost, while the government provides the remaining amount. Repayment includes only the principal, to be completed within four years, with no EMI for the first six months.

This structure significantly lowers the barrier to entry for first‑time founders.

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Schemes Across States:

While the UP model is one of the most talked about, similar schemes exist in multiple states with slight variations.
Uttar Pradesh: Apply at cmyuva.org.in
Madhya Pradesh: Apply at merayuva.mp.gov.in

States continue to roll out initiatives supporting youth-led ventures, making this an ideal moment for aspiring entrepreneurs to explore opportunities.