PMEGP Loan Scheme

What Is PMEGP loan?

The full form of PMEGP is Prime Minister’s Employment Generation Programme

The Prime Minister’s Employment Generation Programme (PMEGP) is a scheme backed by the Government of India, offering credit-linked subsidies. Administered nationally by the Khadi and Village Industries Commission (KVIC), it falls under the Ministry of Micro, Small, and Medium Enterprises. This initiative aims to provide financial support for entrepreneurs looking to kickstart new ventures.


Combining elements from previous schemes like the Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP), PMEGP targets youth employment. Beneficiaries are only required to invest a small percentage (5-10%) of the project cost, with the government providing subsidies ranging from 15-35% based on certain criteria. Participating banks extend the remaining funds as term loans to the entrepreneurs.

KVIC, acting as the national nodal agency, oversees PMEGP’s implementation. At the state level, it collaborates with State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs), and banks. Government subsidies are routed through designated banks, eventually disbursed directly into the beneficiaries’ accounts.

Details Of PMEGP Loan Scheme

Features Of PMEGP Loan Scheme

You can further understand this scheme with the following loan-related details.

  • The PMEGP term loan Scheme has no income ceiling for starting projects and ventures.
  • Banks allocate 90-95% of funds less 15-35% subsidy as PMEGP loan Scheme
  • The rate of interest for this term loans is at the regular applicable rate for the MSME sector.
  • The tenure of loans carries a repayment schedule of 3-7 years after an initial moratorium of maximum of six months.
  • The government subsidy is locked in for a period of 3 years in a separate saving account before either being adjusted to the PMEGP loan or released.
  • Working capital expenditure should be equal to the cash credit limit at least once in 3 years after the subsidy is locked in and utilization should not run below 75% of the sanctioned limit. Your search comes to end apply now for working capital loan.

PMEGP Loan Tenure

The loan tenure under PMEGP spans from three to seven years. In response to the ongoing pandemic, providers of PMEGP loans have introduced a six-month moratorium on all loans acquired through the scheme. After this initial moratorium period, borrowers may be offered a three-year repayment schedule by the bank to settle the loan amount.

Eligibility For PMEGP Loan Scheme

Individuals and organizations can both avail the PMEGP loan scheme provided they satisfy the specified criteria laid down by the concerned authorities. These are –

  • New projects that have not availed any other scheme-related subsidy.
  • Only one individual per family is eligible.
  • Institutions (registered under the Societies Registration Act, 1860), co-operative societies, self-help groups, and charitable trusts.
  • Must have 8th standard pass
  • Projects that cost above ₹10 lakh in the manufacturing sector and ₹5 lakh in the services sector.

PMEGP Loan Interest Rate

The PMEGP loan scheme program offers annual interest rates varying from 11% to 12%. Meanwhile, the Interest Subsidy Eligibility Certificate scheme provides a lower interest rate of 4%. The Khadi and Village Industries Commission bridges the gap between the reduced rate of 4% and the standard rate of 11% to 12%. However, this adjusted rate of 4% is exclusively applicable to enterprises involved in the production of Khadi and/or Polyvastra products.

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Also Read: Business Loan Denied? Here’s What You Should Do Before Reapplying

PMEGP Loan Apply Online

Here are few steps for PMEGP loan apply online login

  • Apply Through advertisements or visit
  • Follow the guidelines and fill out all the necessary details as per your information.
  • After completing all the steps click on “Save applicant data” to save al your details
  • After that upload all the documents as a final step of your application
  • last step, once you complete and submit the details, the password for the same will be sent to your registered mobile no.

PMEGP Loan Apply Offline

  • Fill out all the necessary data in the application form available offline
  • Take the printout of the application form along with the required documents.
  • Detailed project report of the unit to be set up and submit them at the concerned offices.

Also Read: The Best Ways Woman Entrepreneurs In India Can Avail Business Loans

Documents Required For PMEGP Loan Scheme

For PMEGP loan apply , the following documents are required:

PAN card

Aadhaar card

Project report

Class VIII pass certificate

Address proof

Special category certificate (if required)

SC/ST/OBC/Minority/Ex-Servicemen certificate

Entrepreneur Development Programme (EDP) training certificate

Academic and technical certification

Know how you can download your e Pan – Card

Businesses Covered Under The PMEGP Loan Scheme

  • Agricultural-related product or tool manufacturing
  • Research & development for agile technologies
  • Recycling of bio waste products
  • Agro-food processing
  • Clothes manufacturing sector
  • Services & Textiles
  • Hand-made paper and fiber
  • Polymer, and chemical-based products

How Can I Check the Status of My PMEGP Loan Application?

After completing the application process, you must check the status of your PMEGP application on a frequent basis. To easily track PMEGP, follow these steps:

STEP 1: To check your ‘PMEGP loan online application status’, go to the official PMEGP website and click on the ‘Apply’ button under the ‘Registered Applicant’ section.

Step 2: The ‘Login Form for Registered Applicant’ will appear in front of you.

STEP-3: Enter your User ID and password, then click ‘Login’. If you have forgotten your password, simply click on ‘Forgot Password’ to reset it.

STEP 4: On the next screen, select ‘View Status’ for PMEGP tracking. You will be able to view the status of your loan.

Updates Related to PMEGP Loan Scheme

Explore More About: PMEGP Loan Scheme Details for 2024

Recent updates from the government have revised the limits for both sectors. Here are the latest limits and attributes of the PMEGP loan:

  • A maximum limit of Rs. 50 lakh for establishing a manufacturing unit and Rs. 20 lakh for initiating a service sector business.
  • Additional funds beyond these limits can be acquired from the bank as a regular loan, devoid of any subsidy.
  • The special category encompassed in the scheme comprises women, SC, ST, OBC, ex-servicemen, TG, differently abled individuals, and those from aspirational districts or hilly/border regions.
  • Margin money requirements stand at 10% for the general category and 5% for the special category.
  • General category applicants initiating businesses in urban areas are eligible for a 15% subsidy, while those in rural areas qualify for a 25% subsidy.
  • Special category applicants launching businesses in urban areas can avail themselves of a 25% subsidy, while those in rural areas are entitled to a 35% subsidy.
  • The scheme allows for upgradation loans, enabling a second loan for the same business endeavor.
  • All upgradation loans necessitate a 10% margin.
  • Subsidies for upgradation loans are set at 15%, rising to 20% for populations residing in hilly or border regions.

Funding And Subsidies Offered by PMEGP Scheme

PMEGP scheme offers financial assistance to all projects in the rural and urban areas that fall under the Micro-enterprises sector. The projects are categorized under the manufacturing and services sectors. The maximum cost of a project in the manufacturing industry to be admissible is ₹25 lakh, and in the services sector, this limit is ₹10 lakh.

Additionally, any per capita investment in these businesses should not exceed ₹1 lakh in the plains and ₹1.5 lakh in the hills.

In support of this funding from the PMEGP scheme, the borrower is required to make a contribution of 10% of the amount for entrepreneurs belonging to the General category and 5% of the amount for those in the categories of SC/ST/OBC, women, minorities, physically challenged persons, ex-defense employees, and people in the NorthEast region, hills, and border areas, among others.

Now, the remaining amount of the total cost of the industry project to be set up is provided by the banks in the form of term loans to the entrepreneur of the micro-unit business. This term loan is the PMEGP loan.

The rate of subsidy allotted will be 15% for the General category in urban areas and 25% in rural regions. For the special categories mentioned above, the subsidy from the government will amount to 25% for urban areas and 35% for rural ones.

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The PMEGP is a central sector scheme, and beneficiaries are to be selected at the district level by a task force of the nodal agencies. In this regard, individuals who have undergone entrepreneurship and or skill development programs such as, EDP, SDP, ESDP, or vocational training can submit project applications to banks directly. A scorecard devised in consultation with SBI and RBI will form the basis for the selection.


Do We Need Any Collateral To Apply for PMEGP Loan?

NO, This term loan requires no collateral security for amounts up to ₹5 lakh. Furthermore, the units that are eligible for PMEGP are covered under the Credit Guarantee Fund Scheme for Micro & Small Enterprises, with the exclusion of margin money or subsidy component.

Who Are Not Eligible For PMEGP Loan Scheme?

Any enterprise producing goods considered harmful to the environment such as plastic containers, plastic bags, etc. Here are some criteria which explain who are all not eligible for PMEGP –

  • Meat slaughtering, processing, canning, etc.
  • Production or manufacturing of intoxicants and tobacco-related products
  • Horticulture, animal husbandry, sericulture, and floriculture
  • Rural Transport

By indifi

2 thoughts on “PMEGP Loan Scheme – Apply Online / Offline, Interests & benefits”
  1. Supposed I have a micro industry ( 22 lac) for manufacturing paper’s bag plates cups etc.
    Any guideline for requirements of workers

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