What is PMEGP Loan?
PMEGP (Prime Minister's Employment Generation Programme) is a credit-linked subsidy scheme administered by KVIC (Khadi and Village Industries Commission) and implemented through nationalized banks. It aims to generate employment by helping individuals and groups set up new micro enterprises in manufacturing and service sectors.
Under PMEGP, borrowers receive a government subsidy of 15%–35% of the project cost as a non-repayable grant, while the remaining amount is provided as a term loan by the bank. The beneficiary must contribute 5%–10% of the project cost as margin money.
PrimeWealth Advisory provides complete assistance — from project report preparation to application filing on the PMEGP e-portal and bank coordination.
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Key Benefits
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Government Subsidy: 15–25% subsidy for urban areas, 25–35% for rural areas — non-repayable
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Higher Subsidy for Special Categories: SC/ST, OBC, women, ex-servicemen, minorities, and differently-abled get higher subsidy rates
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No Collateral: Loan amount up to ₹10 lakh requires no collateral security
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Manufacturing & Service Both: Covers all legal manufacturing and service activities
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Multiple Sectors: Food processing, handicrafts, textiles, agro-based industries, services, and more
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Employment Generation: Creates sustainable self-employment opportunities
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Pan India Availability: Available in all states and union territories through KVIC, KVIB, and DIC
Eligibility Criteria
- Any individual above 18 years of age
- Minimum 8th standard pass for projects above ₹10 lakh (manufacturing) and ₹5 lakh (service)
- Self-help groups, institutions registered under Societies Registration Act, production co-operative societies, charitable trusts also eligible
- Existing units or units already availing Government subsidy under other schemes NOT eligible
- New enterprises only — the unit must not have commenced production before PMEGP sanction
Documents Required
Aadhaar Card
PAN Card
Educational qualification certificate
Caste certificate (for SC/ST/OBC)
Project report (we prepare this)
Passport size photos
Bank account details
Proof of address
Special category certificate if applicable (ex-serviceman, differently-abled, etc.)
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Step-by-Step Process
01
Eligibility Check
We confirm your eligibility based on category, location, and project type.
02
Project Report Preparation
Detailed bankable project report including cost of project, means of finance, profitability projections.
03
PMEGP e-Portal Application
Application filed on the official PMEGP e-portal (kviconline.gov.in).
04
Scrutiny by KVIC/KVIB/DIC
Your application is reviewed by the implementing agency in your district.
05
Interview & Shortlisting
Shortlisted candidates are called for an interview/orientation program.
06
Bank Application
Application forwarded to the bank branch for loan sanction.
07
Subsidy Disbursement
Upon sanction, subsidy amount is locked in a 3-year fixed deposit — released after 3 years as you service the loan.
PMEGP Subsidy Rates — Category-wise Breakdown
The subsidy under PMEGP varies based on the location of the project and the category of the beneficiary:
General Category — Urban15% of project cost. Maximum loan: ₹50 lakh (manufacturing), ₹20 lakh (service).
General Category — Rural25% of project cost. Higher subsidy to encourage rural entrepreneurship.
Special Category — Urban (SC/ST/OBC/Women/Ex-servicemen/Minorities/PwD/NE Region)25% of project cost in urban areas.
Special Category — Rural35% of project cost — the highest subsidy rate available under PMEGP.
Beneficiary must contribute 5% of project cost (general) or 10% (for higher subsidy categories) as own margin money.
Frequently Asked Questions
What types of businesses are covered under PMEGP?
Manufacturing industries including food processing, textiles, paper, chemicals, engineering, and service activities like repair workshops, salons, computer services, and more. Agriculture per se and MSME units already receiving subsidy are excluded.
Is PMEGP available for second loan?
PMEGP second loan (PMEGP 2.0) is available for existing PMEGP units that have successfully run for 3+ years — up to ₹1 crore for manufacturing and ₹25 lakh for service.
How long does PMEGP sanction take?
Typically 60–90 days from application to final disbursement, subject to KVIC/DIC scrutiny and bank processing timelines.
What is the bank's role in PMEGP?
The bank sanctions the total project loan (after subtracting subsidy and margin money) and disburses funds. The subsidy is deposited by the government into a TDR in the beneficiary's name for 3 years.
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