Highlights
What is PMEGP?
Objectives
Benefits of the PMEGP Scheme
Financial Assistance Under the PMEGP Scheme
Eligibility for PMEGP Loan
Documents Required for PMEGP Loan
Application Process for PMEGP Loan
Examples of Where PMEGP Loan Can be Used

The PMEGP scheme helps entrepreneurs start small businesses in order to promote self-employment. The scheme offers collateral-free loans and subsidies to encourage new business ideas across India.

Highlights

A flagship credit-linked subsidy scheme by the Ministry of MSME and Khadi and Village Industries Commission (KVIC), launched in 2008 and extended till 2026.
The scheme has a total outlay of ₹13,554.42 crore, aimed at promoting entrepreneurship and self-employment across India.
Helps you start your own business in manufacturing or services with financial support and government backing.
Targets include setting up 4 lakh new projects, creating 30 lakh new jobs, and upgrading 1,000 existing units every year.

What is PMEGP?

The PMEGP Scheme helps you start a new business in the manufacturing or service sector with government support. It’s a loan + subsidy combo, wherein you don’t just get a loan from the bank, but the government shall also pay a part of it as a non-repayable subsidy. It helps you start your business easily and at a lower cost.

Objectives

Kickstart your entrepreneurship journey by creating self-employment.
Support local crafts and village industries to grow.
Promote jobs in rural and urban areas, reducing migration.
Push for balanced development by supporting businesses in less developed areas.

Benefits of the PMEGP Scheme

Financial Support
You get access to bank loans + subsidy to set up your own non-farm business.
No Collateral Needed (Up to ₹10 lakh)
You don’t need to pledge any assets for loans up to ₹10 lakh.
Local Job Creation
Set up locally, hire locally, and reduce the need to migrate to cities.
Extra Benefits for Special Categories
Higher subsidies for SC, ST, women, and minorities.

Financial Assistance Under the PMEGP Scheme

Loan Limit:

Up to ₹50 lakh for Manufacturing Industries
Up to ₹20 lakh for Service Based Industries

Interest Rate:

As per the bank’s prevailing rates around 11-12% per annum (depending on the specific bank and loan size).

Repayment Period:

3 to 7 years, with a 6-month moratorium or grace period to stabilize your business.

1. Subsidy Breakdown for PMEGP Scheme

Category	Your Contribution	Subsidy (Urban)	Subsidy (Rural)
General	10%	15%	25%
Special*	5%	25%	35%

*SC, ST, OBC, Minorities, Women, Ex-Servicemen, Transgenders, Differently-abled, NER,

Aspirational Districts and Hill/Border areas.

Once your project is approved, the subsidy is added as margin money, helping reduce the loan burden.
The rest is a bank loan, making the overall setup more affordable and easier to manage.

2. Second Loan for Upgrading Your Existing PMEGP/MUDRA Unit

Are you running a business already funded by PMEGP or Mudra scheme? You can apply for a second loan to expand or modernise your business.

Maximum Loan for Manufacturing: ₹1 crore
Maximum Loan for Service: ₹25 lakh

Category	Your Contribution	Subsidy
All*	10%	15% (20% in NER & Hills)

*Use this second loan to upgrade tech, expand capacity, or modernise operations in your existing business.

Eligibility for PMEGP Loan

You are eligible if:

You are 18+ (and 8th pass for projects over ₹10 lakh in manufacturing or ₹5 lakh in services).
You are a first-time entrepreneur.
You belong to an SHG, trust, society, or institution (if not already using a subsidy scheme).
You plan to start a non-farm manufacturing or service business.

You are not eligible if:

You already run a business.
You have availed any other government subsidy.
You have a poor credit history.
Your activity is farm-based.

Documents Required for PMEGP Loan

Aadhaar card & PAN card
Educational qualification proof (if applicable)
Caste certificate (for claiming a higher subsidy)
Project report with cost breakdown
Rent/ownership proof of business premises
Udyam registration (preferred)
A recent passport-size photo

Application Process for PMEGP Loan

You can apply:

Online on the official PMEGP portal.
Offline through designated banks or financial institutions.

Examples of Where PMEGP Loan Can be Used

Readymade garment unit producing affordable fashion.
Brass handicrafts business serving local and export markets.
Pickles, juice, and jam units catering to regional tastes.
Spices mill supplying packaged masalas.
Women-led small enterprises driving local employment.
A food processing unit making packaged snacks and essentials.

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