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PMEGP Loan

PMEGP Scheme

Last Updated 27th Jul 2021

PMEGP is a credit-linked subsidy programme monitored by the Ministry of Micro, Small and Medium Enterprises, Government of India.

Interest rate 11% to 12%
Loan limit ₹ 9.50 Lakh to ₹ 23.75 Lakh
Maximum project cost
  • Manufacturing sectors: ₹ 25 Lakh
  • Service sectors: ₹ 10 Lakh
Subsidy 15% to 35%
Tenure 3 years to 7 years
Minimum age of the applicant 18
Apply for Business Loan @ 14.00%*

Prime Minister’s Employment Generation Programme

Prime Minister Employment Generation Programme (PMEGP) is a credit-linked subsidy programme launched in 2008 to provide employment opportunities. Under this programme, you have to invest 5% to 10% of the total cost, and the government provides a subsidy of 15-35% based on the eligibility criteria. PMEGP is implemented by Khadi and Village Industries Commission or KVIC and integrates two schemes: prime minister's Rojgar Yojana and Rural Employment Generation Programme, which aims to achieve the same objectives.

PMEGP Project

The PMEGP project operates with the following four objectives.

  • Set up micro-enterprises and self-employment projects in both rural and urban areas, thereby creating more employment opportunities.
  • To provide opportunities for ethnic craftsmen or artisans and unemployed youth to create self-employment avenues.
  • Provide sustainable employment, especially for ethnic artisans, to prevent rural youth from moving to urban areas searching for work, and to ensure employment throughout the year for seasonally employed people.
  • Increase the growth rate of employment in urban and rural areas by increasing individual earning capacity.

Features of PMEGP Scheme

The PMEGP extends financial assistance through the PMEGP loan scheme for encouraging micro-entrepreneurship. PMEGP Loan Details are elaborated in the below- mentioned paragraphs.

Loan quantum

In accordance with the Micro, Small and Medium Enterprises or MSME, the Prime Minister's Employment Generation Programme has set different maximum project costs for manufacturing sectors and service sectors.

Enterprise Maximum project cost
Service sectors₹ 10 Lakh
Manufacturing sectors₹ 25 Lakh

Self-investment

The maximum limit for self-investment under the PMEGP Loan scheme has been set based on the location of the enterprise or project.

Enterprise location Maximum project cost
Plain area₹ 1 Lakh
Hilly area₹ 1.50 Lakh

Loan tenure

The PMEGP loan tenure ranges from 3 years to 7 years. Due to the current pandemic situation, the PMEGP loan providing banks have offered a moratorium period of 6 months on all loans taken under the PMEGP scheme.

Allocation

Banks fund 90-95% of the project cost based on the category of the borrower. The subsidy received from the programme is considered as margin money, and it is proportionate to the capital expenditure of the borrower.

PMEGP Subsidy Scheme

Under the PMEGP project, beneficiaries are required to pay a minimum portion for the project cost and avail subsidy on loan taken from the banks linked with the scheme. The subsidy is decided based on the category and area to which the applicant belongs. The subsidy under this scheme is termed as margin money. The subsidy rates under the PMEGP scheme are furnished in the following table.

CategoryShare of the beneficiary (portion of the total project cost) Share provided by the bank (portion of the total project cost)Subsidy rate
Urban area Rural area
General10%90%15%25%
Special5%95%25%35%

The special category under PMEGP scheme includes SC, ST, OBS, minorities, ex-servicemen, physically disables and individuals living in hilly and border areas.

PMEGP Loan Interest Rate

The interest rates under the PMEGP loan scheme range from 11% to 12% per annum. However, the Interest Subsidy Eligibility Certificate scheme grants concessional interest rates of 4%. This gap between the modified interest rate of 4% and the regular interest rate of 11% to 12% is adjusted by the Khadi and Village Industries Commission. However, the adjusted interest rate of 4% is available for enterprises dealing with Khadi and/or Polyvastra products only.

Eligibility Criteria

Before applying for the PMEGP loan facility, you must check the eligibility criteria as per the guidelines of PMEGP.

  • Applicants ageing at least 18 years.
  • Applicants with minimum educational qualification of VIII standard.
  • Self-help groups not availing the benefits of any other social welfare scheme.
  • Charitable trusts
  • Societies registered under Societies Registration Act of 1860
  • Co-operative societies involved in the production business.
  • Loan facility is available for new ventures only.

Documents required for PMEGP Loan Application

To apply for PMEGP Loan, you require to submit the following documents:

  • KYC Documents & PAN Card
  • Detailed Project Report
  • Supporting documents related to qualifications and bank statements
  • Special category certificate, if required
  • Authorisation Letter

PMEGP Loan Bank List

Some of the leading banks that provides financial assistance through PMEGP Loan are mentioned below:

Allahabad BankICICI Bank Ltd.
Andhra BankIDFC First Bank
Axis BankIndian Bank
Bank of BarodaKotak Mahindra Bank
Bank of IndiaPunjab National Bank
Canara BankState Bank of India
Central Bank of IndiaUCO Bank
HDFC Bank Ltd.Union Bank of India

Sectors that can avail PMEGP Loan

You can avail PMEGP Loan if you work in the following sectors:

  • Agro-based Food Processing
  • Service and Textile
  • Forest-based Products
  • Hand Made Paper and Fibre
  • Rural Engineering and Bio-Tech
  • Mineral-based Products
  • Polymer and Chemical-based Products

PMEGP Apply Online

You can apply for the PMEGP scheme online by submitting the PMEGP Application Form on the official portal of the Prime Minister Employment Generation Programme. Follow these steps and make your application seamlessly if you are both an individual or non-individual applicant.

  • Land on the official KVIC website of PMEGP, https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp.
  • Once on the home page, tap on either ‘Online Application form for Individuals’ or on ‘Online Application form for Non-individuals’. You can copy and paste the URL in another tab ‘https://kviconline.gov.in/pmegpeportal/jsp/pmegponline.jsp’ to directly access the form for individuals.
  • Once the form has been accessed, fill it up with the required details.
  • Click on ‘Save applicant data’ and the file will be saved.
  • Upload the required documents and submit them together with the form.
  • After successful submission, an acknowledgment ID and password will be sent to the registered mobile number of the applicant.

If you are a non-individual applicant you need to perform an additional step. After landing on the official website and taking the option of ‘Online Application form for Non-individuals’, select a category from ‘Self-help Groups’, ‘Trust’, ‘Regd. Institutions’ and ‘Co-operative Societies’. The component of the forms of the above-mentioned categories will vary.

Tips to Get PMEGP Loan

To get a PMEGP Loan, it is essential to keep the following things in mind.

  • Finalize the business idea
  • Identify the location, plant and other details
  • Create an efficient project report
  • Select the correct form as per individual and non-individual status
  • Upload all required documents.

PMEGP Tracking Steps

Once you have applied for PMEGP Loan, you can track the status of PMEGP Loan Application using the steps as mentioned below:

  • Visit the official link of PMEGP kviconline.gov.in/pmegp/
  • Click on ‘Login Form for Registered Applicant’.
  • Enter your ID and Password and click on Login
  • To know the status of your PMEGP loan application, click on ‘View Status’

PMEGP Project Profile Example

Based on various projects, the Indian Government has published profiles of various businesses which are covered under the PMEGP. In these profiles, you can find complete information about a business in the concerned field. From market potential to the technical aspect of making a product, and from capital investment to means of procuring the finance along with allocation is given in the project profile.

You can view the details of various projects profiles and its examples on any of the following website:

  • Website of KVIC (Khadi and Village Industries Commission), or use this URL - https://www.kviconline.gov.in/pmegp/pmegpweb/docs/jsp/newprojectReports.jsp.
  • Website of MSME (Micro, Small and Medium Enterprises), or use this URL - http://www.dcmsme.gov.in/publications/pmryprof/content.html.

PMEGP Helpline Number

In case of any concerns regarding PMEGP you can contact PMEGP Helpline Number 07526000333/07526000555. You can also write to PMEGP Helpline Desk at helpdesk@udyami.org.in

FAQs

Which business comes under PMEGP?

Following business comes under PMEGP:

  • Food processing units using agriculture-based products as raw materials
  • Forest-based products
  • Mineral, chemical, polymers-based products
  • Handmade fibers and paper
  • Textile products
  • Biotechnology
  • Service
  • Rural engineering.

Is PMEGP collateral-free?

According to the RBI guidelines, an enterprise with a project cost up to ₹ 10 Lakh is collateral-free. Furthermore, CGTMSE provides collateral security to projects ranging from ₹ 5 Lakh to ₹ 25 Lakh.

How long does it take to get PMEGP loan?

It takes 60 days for banks to evaluate the PMEGP loan application and sanction the amount to the beneficiaries.

What is a PMEGP subsidy?

PMEGP subsidy is the financial assistance the Central Government provides on loans taken under the PMEGP scheme for encouraging micro-entrepreneurship.

Under the PMEGP scheme, is there a provision for borrowers proposing multiple units?

Under the provision of the PMEGP scheme, borrowers are allowed only one unit.

How can I check PMEGP Application Status?

To check your PMEGP Application status, visit the official website of PMEGP at kviconline.gov.in/pmegp/. Now enter your login ID and password to know the status.

Which bank is best for PMEGP Loan?

There are various private and Public Sector Banks, Regional Rural Banks (RRBs), Co-operative Banks, Small Finance Banks (SFBs), Non-Banking Financial Companies (NBFCs), Foreign Banks and Scheduled Urban Banks etc, that provide PMEGP Loan. Some of the leading banks that provide PMEGP Loan are Allahabad Bank, Axis Bank, Bank of Baroda, SBI & PNB etc.

Can a Bank reject PMEGP Loan Application?

Yes a bank can reject your PMEGP Loan application either if you do not fulfill the eligibility criteria or due to any other specific reason. In case the bank rejects your application, you may demand to give the reason for the same.

What to do if the bank rejects your PMEGP Loan Application?

If the bank rejects your application, you may demand the bank to give the reason for the same in writing.


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