PMEGP Loan

Prime Minister’s Employment Generation Programme (PMEGP) is a central government scheme, administered by the Union Ministry of Micro, Small and Medium Enterprises (MoMSME). The primary objective of this scheme is to promote self-employment opportunities in the rural and urban areas by providing credit-linked subsidy to new self-employment ventures/micro-entreprises/projects.

The subsidy is offered in the form of margin money subsidy, which ranges from 15% to 35% for new units/projects of up to Rs 50 lakh in the manufacturing segment and up to Rs 20 lakh in the services segment. In case of units where the total project cost exceeds Rs. 50 lakh for the manufacturing segment and Rs. 20.00 lakhs for the services segment, the balance credit can be availed from the banks without any Government subsidy.

In case of the second loan sanctioned to existing PMEGP units for their upgradation, the maximum cost of the project/unit eligible for Margin Money subsidy is Rs 1 crore for the manufacturing segment and Rs 25 lakh for the services segment. For the 2nd PMEGP loans, the maximum subsidy has been capped at Rs.15 lakh (Rs.20 lakh for North East Region (NER) and Hill States) for manufacturing units and at Rs.3.75 lakh (Rs.5 lakh for North East Region and Hill States) for service units.

In case of units where the total project cost exceeds Rs. 1.00 Crore for the manufacturing segment and Rs. 25.00 lakhs for the services segment, the balance credit can be availed from the banks without any Government subsidy.

PMEGP scheme is implemented by the Khadi and Village Industries Commission (KVIC) at the national level and through State Khadi and Village Industries Boards (KVIBs), State offices of KVIC, Coir Board (for coir related activities), District Industries Centres (DICs) and banks at the state level.

The margin money subsidy is routed by the KVIC to the financing bank’ branches through the nodal bank. Subsequently, the financing bank’s branch credits the subsidy in the borrower’s account after the completion of lock-in period, depending on the outcome of the physical verification report.

Margin money (subsidy) will be a ‘one-time assistance’. The subsidy is not available for any enhancement of credit limit or modernization or expansion of the project, except in case of units selected for upgradation through 2nd loan under this Scheme. The PMEGP units are required to be registered under the Udyam Portal before the adjustment of Margin money in the loan account.

Projects financed jointly, i.e. from two different banks or financial institutions, are not eligible for margin money assistance.

Rate of Subsidy for setting up of new enterprise or unit

Rate of Subsidy for existing PMEGP/REGP/MUDRA units (2nd Loan for upgradation)

Entrepreneurship Development Programme (EDP) training is mandatory for claiming margin money through PMEGP e-portal.  For projects costing above Rs 5 lakhs, the beneficiary has to undergo EDP training for 10 working days and 5 working days for projects costing up to Rs 5 lakhs. The training is not compulsory for projects costing up to Rs 2 lakhs.

The training will involve interacting with successful rural entrepreneurs, banks, and field visits. KVIC has developed an online module to offer free 2-day EDP training to prospective entrepreneurs.

The applicants, who have already undergone training of a minimum of 60 hours (for online mode) and a minimum of 10 days (for offline mode) under EDP or Entrepreneurship cum Skill Development Programme (ESDP) or Skill Development Programme (SDP) or Vocational Training (VT) are not required to undergo EDP training again.

The beneficiaries can apply for a PMEGP loan online by following the below steps:

Step 1: Visit PMEGP portal https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp

Step 2: Fill out the PMEGP loan application form online and save your data. After saving the application, the username and password will be sent to the applicant’s registered mobile number. These credentials can be used to track the status of the application.

Step 3: Upload the following documents with photo –

Step 4: Submit the application form. A unique Application ID will be generated and sent to the registered Email ID. The application form and documents will be electronically forwarded to the representatives of the preferred IA.

Within 5 working days of receiving the application, the nodal officer of KVIC, State KVIB, DIC, and other IAs will contact the applicant by phone or in person to confirm the receipt and acceptance of the application for preliminary scrutiny. The applicant must submit their own contribution along with a copy of the EDP training certificate, photo, and Aadhaar number to the Financing Bank within 30 working days of receiving the communication of his loan sanction. The EDP certificate will be uploaded by the training institute.

For PMEGP new enterprises (Units)

Stated below are the eligibility criteria for setting up new enterprises under the PMEGP scheme.

For up-gradation of existing PMEGP/REGP/MUDRA units:

Stated below are the eligibility criteria for availing second PMEGP loan for the upgradation of existing units financed under PMEGP/MUDRA Scheme:

Listed below are the activities not eligible for PMEGP loan under the scheme:

(As a special case piggery, which is a major source of livelihood in NER, may also be allowed in NER states only)

For setting up new enterprises

Stated below is the list of scanned documents (up to 1 MB) required for the online PMEGP loan application.

For existing PMEGP/REGP/MUDRA units (2nd Loan for upgradation)