Launched in 2008, the PMEGP is a flagship credit-linked subsidy scheme by the Ministry of MSME. It helps individuals start new micro-enterprises in non-farm sectors across urban and rural India. The scheme offers financial aid, margin money subsidy, and second loan options for eligible entrepreneurs.

Objectives of PMEGP

• Promote self-employment in rural and urban India
• Encourage traditional artisans and youth to start businesses
• Provide sustainable jobs and reduce rural-to-urban migration
• Empower youth with financial assistance and EDP training

Implementing Agencies

• National Level – Khadi and Village Industries Commission (KVIC)
• State Level – State KVIBs, DICs, Coir Board, Banks
• Other recognized agencies may also participate

Financial Support Structure

1. New Units

• Max Project Cost (Manufacturing): ₹50 Lakhs
• Max Project Cost (Service): ₹20 Lakhs

2. Second Loan (For Existing Units)

• Max Project Cost (Manufacturing): ₹10 Cr | Subsidy: up to ₹15–20 Lakhs
• Max Project Cost (Service): ₹25 Lakhs | Subsidy: up to ₹3.75–5 Lakhs

Eligibility Criteria

• Indian citizens above 18 years of age
• For projects above ₹10 lakh (Manufacturing) and ₹5 lakh (Service): must have passed 8th standard
• Only new projects are eligible
• Existing units already availed benefits under other schemes are not eligible
• For second loan: unit must have repaid the first loan, completed the 3-year lock-in, and show profitability

How to Apply – Online/ Offline Process

Online Application (New Units)

1. Visit: PMEGP Portal

2. Click “Apply” under New Unit

3. Fill out the form and upload documents

4. Submit for verification and processing

Online Application (Second Loan)

1. Visit the same portal

2. Click “Apply” under Existing Units (2nd Loan)

3. Fill out the second loan form and upload the required documents

4. Submit application

Necessary Documents for Application

• Aadhaar Card
• Caste/Category Certificate
• Rural Area Certificate (if applicable)
• Project Report
• Educational Qualification Certificate
• EDP/Skill Training Certificate
• Bank account details
• Any other applicable documents

Ineligible Activities (Negative List)

• Meat processing or liquor-related units
• Beedi/Pan/Cigarette manufacturing
• Agricultural cultivation/plantation (tea, coffee, rubber, etc.)
• Hotel/Dhaba serving alcohol
• Tobacco or toddy tapping
• Any prohibited activity by local authorities

Frequently Asked Questions (FAQs)

Q: What is the main objective of PMEGP?
A: To generate employment by supporting new self-employment ventures and micro-enterprises in rural and urban India.

Q: What is the maximum subsidy available under PMEGP?
A: Up to 35% of the project cost for special categories in rural areas (max project cap: ₹50 lakh for manufacturing, ₹20 lakh for service).

Q: Can I apply for PMEGP if I have already availed another government subsidy?
A: No. PMEGP is only for new projects not covered under any other central/state scheme.

Q: Is EDP training mandatory?
A: Yes, completion of the Entrepreneurship Development Programme (EDP) is mandatory for loan disbursement.

Q: How can I track the status of my PMEGP application?
A: Use your Application ID on the PMEGP portal login to view real-time updates.

Q: Can I apply for PMEGP as part of a partnership firm?
A: Yes, but only one partner from a family can receive assistance. One member must meet eligibility conditions.

Q: Can second-hand machinery be included in the project cost?
A: No, second-hand machinery is not eligible under PMEGP-supported projects.

Q: Are loans collateral-free?
A: Loans under ₹10 lakh are usually collateral-free, as per RBI guidelines, but banks may assess risks individually.

Q: How long does it take for the PMEGP loan to be sanctioned?
A: Approx. 30–60 days from complete application submission and successful EDP training, subject to bank verification.

Useful Links

• Apply Online – New Unit
• Apply Online – Second Loan
• PMEGP Guidelines PDF
• FAQs – KVIC