What this scheme offers
PMEGP combines bank financing with a government margin-money subsidy to help new entrepreneurs set up micro-enterprises, in both rural and urban areas, across manufacturing and service sectors. The subsidy — 15% to 35% of project cost, depending on your category and whether the unit is rural or urban — is deposited directly by the government; your bank EMI is calculated only on the remaining loan amount. Maximum project cost is ₹50 lakh for manufacturing and ₹20 lakh for services. Applicants contribute 10% margin money under the general category, or just 5% under special categories (SC/ST, women, persons with disabilities, ex-servicemen, North-Eastern region). Since 2008, PMEGP has funded over 9.6 lakh units and is credited with creating more than 77 lakh jobs. A second-loan route (up to ₹1 crore) is also available for units that have run successfully for 3+ years.
Who is eligible
- Any Indian citizen aged 18 or above.
- Minimum Class 8 pass required for projects above ₹10 lakh (manufacturing) or ₹5 lakh (services).
- Individuals, Self-Help Groups, production cooperative societies, and charitable trusts can apply.
- Only new projects are eligible — not for expanding an existing business (a separate second-loan route exists for that).
Documents required
- Aadhaar card and PAN card
- Educational certificates
- Caste certificate, where applying under a special category
- Detailed Project Report (DPR)
- Passport-size photograph
How to apply
- Prepare a Detailed Project Report describing your proposed enterprise, costs, and viability.
- Visit the official PMEGP e-portal (kviconline.gov.in/pmegpeportal) and click "PMEGP Online Application."
- Fill out the application form with your personal and project details.
- Upload your Aadhaar, PAN, educational and caste certificates (if applicable), and the DPR.
- Your application is routed for appraisal by the implementing agency (KVIC, KVIB, or DIC) and then to a bank for loan sanction.
- Once the bank sanctions and disburses the loan, the government's subsidy portion is credited directly, reducing your effective loan amount.