Apna Udyog, Sarkari Sahayata Ke Saath
In English: your own enterprise, with government support.
PMEGP Loan and Subsidy Assistance for New Entrepreneurs
Want to start your own unit but worried about funds? PMEGP combines a bank loan with a government subsidy, and a good project report is where it starts.
The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme for setting up new micro enterprises. Work out your subsidy below, then let GRO-MSME help you prepare the project report and documents and apply.
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GRO-MSME provides advisory, project report and application assistance. PMEGP approvals, subsidy and loan sanction are decided by KVIC, the state agencies and the bank under the scheme guidelines.
What Is the PMEGP Loan?
PMEGP is a credit-linked subsidy scheme of the Ministry of MSME, implemented nationally by the Khadi and Village Industries Commission (KVIC), that helps set up new micro enterprises. The applicant contributes part of the project cost, the bank provides the loan, and the government gives a margin money subsidy of 15% to 35% depending on the applicant’s category and whether the unit is in an urban or rural area.
PMEGP Subsidy Calculator: How Much Will You Get?
Choose your sector, category and location, and enter the project cost to see the subsidy, your own contribution and the bank loan.
PMEGP Subsidy Rates and Own Contribution
The subsidy rate depends on your category and where the unit is located.
| Category of beneficiary | Own contribution | Subsidy: urban area | Subsidy: rural area |
|---|---|---|---|
| General category | 10% of project cost | 15% | 25% |
| Special category (SC, ST, OBC, minorities, women, ex-servicemen, persons with disabilities, NER, hill and border areas and others listed in the guidelines) | 5% of project cost | 25% | 35% |
The maximum project cost considered is ₹50 lakh for manufacturing and ₹20 lakh for the business and service sector. The balance of the cost is financed by the bank. Banks are advised to extend collateral-free loans up to ₹20 lakh to units financed under PMEGP (RBI Master Direction). Sources: Ministry of MSME, KVIC PMEGP e-portal, RBI. Check the portal for revisions.
Check Your PMEGP Eligibility
Tell us your business idea, location and project cost. GRO-MSME checks scheme fit and helps with your project report, documents and application.
- Free call back from GRO-MSME experts
- Eligibility check and document guidance
- Support from application to follow-up
Prefer to talk? +91-9811312259
Who Is Eligible for a PMEGP Loan?
Conditions come from the scheme guidelines. Confirm the current version on the PMEGP portal before you apply.
Usually eligible
- Individuals above 18 years of age
- Self-help groups, societies and other institutions listed in the guidelines
- Applicants setting up a new manufacturing, business or service unit
- Applicants who complete the required EDP (entrepreneurship development) training
- Applicants meeting the minimum education condition for higher-cost projects
Usually not eligible
- Existing units, including units that have already received a government subsidy
- Expansion or modernisation of a running business
- Projects above the sector cost ceiling (the subsidy is worked out on the ceiling only)
- Applicants who skip the required training
How to Apply for PMEGP: Step by Step
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Choose your project and prepare the report
Pick a manufacturing, business or service activity and prepare a project report with cost, capacity and projections.
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Apply on the PMEGP e-portal
Fill in the online application for a new unit with your personal, project and preferred bank details and upload your documents.
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Interview, EDP training and bank appraisal
The application is processed by the implementing agency and the bank, which checks the project’s feasibility and your loan eligibility. EDP training is required.
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Sanction, margin money and set-up
If the bank sanctions the loan, the subsidy is placed with the bank as margin money and you set up the unit.
PMEGP vs MUDRA: What Is the Difference?
Both help small businesses borrow, but they work differently.
| Feature | PMEGP | MUDRA loan |
|---|---|---|
| What it is | Credit-linked subsidy scheme | Loan scheme for micro and small businesses |
| For whom | New units only | New and existing non-farm micro enterprises |
| Subsidy | Margin money subsidy of 15% to 35% | No subsidy |
| Implemented by | KVIC, KVIBs, DICs and banks | Banks and financial institutions under MUDRA |
| Best when | You are starting a new unit and want a subsidy | You run or plan a small business and want quick, small-ticket credit |
General comparison. See the MUDRA site for its current loan categories.
Common PMEGP Application Mistakes
Applying for an existing business
PMEGP is for new units. An already running unit, or one that took another subsidy, is not eligible.
Weak or copied project report
A generic report that does not match your machinery, location or market invites questions and delays.
Ignoring the training requirement
EDP training is part of the scheme, and skipping it can hold up your subsidy.
Wrong category or location
Choosing the wrong category or urban/rural status changes the subsidy rate and can lead to rejection.
Underestimating own contribution
You must bring 5% or 10% of the project cost, so plan your funds before you apply.
No plan for working capital
Projects often fail on cash flow. Include a realistic working capital estimate in the report.
Documents Usually Needed for PMEGP
Keep these ready. The portal and your bank will confirm the exact list.
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How GRO-MSME Helps With Your PMEGP Application
We work on the parts that most often hold applications back: scheme fit, project report and documents.
Check scheme fit
We look at your idea, location, category and project cost against the scheme guidelines and tell you where you stand.
Prepare the project report
We help you prepare a project report the bank and the implementing agency can evaluate. See our project report (DPR) page.
Documents and application
We help you assemble papers, follow the online application and follow up with the bank.
Related GRO-MSME Services
PMEGP Loan: Frequently Asked Questions
What is PMEGP?
The Prime Minister’s Employment Generation Programme is a credit-linked subsidy scheme of the Ministry of MSME. KVIC is the nodal agency at the national level. It supports setting up new micro enterprises through a bank loan combined with a margin money subsidy.
Who is eligible for a PMEGP loan?
PMEGP is for new projects, not for expansion of existing units. Individuals, and certain groups and institutions listed in the guidelines, can apply, subject to conditions on age, category, project cost and training. Check the current guidelines on the PMEGP portal, or ask GRO-MSME to review your case.
How much subsidy is given under PMEGP?
For the general category the subsidy is 15% in urban areas and 25% in rural areas. For special categories it is 25% in urban areas and 35% in rural areas. The applicant contributes 10% (general) or 5% (special category) of the project cost.
What is the maximum project cost under PMEGP?
Under the scheme guidelines the maximum project cost considered for subsidy is ₹50 lakh for manufacturing and ₹20 lakh for the business and service sector. Check the portal for any revision.
What documents are needed for a PMEGP application?
Commonly identity and address proof, category and qualification certificates where applicable, a project report, quotations for machinery or equipment, proof of location, and bank details. GRO-MSME helps you assemble and check the set.
Is a project report required for PMEGP?
Yes. A project report with cost, capacity and financial projections is part of the application and is evaluated by the agency and the bank. GRO-MSME can help you prepare it; see our page on project reports (DPR) for bank loans.
What is the difference between PMEGP and MUDRA?
PMEGP is a credit-linked subsidy scheme for new units, with a margin money subsidy of 15% to 35%. MUDRA is a loan scheme for micro and small non-farm businesses, new or existing, without a subsidy.
Does GRO-MSME approve PMEGP loans or subsidy?
No. Approval, subsidy and loan sanction are decided under the scheme by KVIC, the state agencies and the bank. GRO-MSME provides advisory, project report and application assistance.
Ready to Start Your Own Unit?
Tell us your business idea and location and GRO-MSME will check PMEGP fit and help you apply. Apna Udyog, Sarkari Sahayata Ke Saath — talk to GRO-MSME.
- Free call back from GRO-MSME experts
- Eligibility check and document guidance
- Support from application to follow-up
Prefer to talk? +91-9811312259