A key step towards job creation:
Prime Minister’s Employment Generation Programme (PMEGP)
PMEGP Scheme 2025 – Are you dreaming of starting your own business or self-employment? Do you need financial assistance for this dream? If so, the Prime Minister’s Employment Generation Programme (PMEGP), launched by the Government of India to promote entrepreneurship in rural and urban areas, will come to your aid.
This loan-based subsidy scheme has been implemented with the aim of promoting job creation through setting up enterprises. PMEGP Loan 2025
What is PMEGP Scheme?
The Prime Minister’s Employment Generation Programme (PMEGP) is a flagship scheme launched by the Ministry of Micro, Small and Medium Enterprises in August $\text{2008}$.
The scheme was created by merging two earlier schemes, namely Pradhan Mantri Rozgar Yojana and Rural Employment Generation Programme.
Main objective: To create massive employment opportunities by setting up micro-enterprises in the non-farm sector in rural and urban areas.
The government has approved a total outlay of Rs. 13,554.42 crore for this scheme for a period of five financial years (2021-22 to 2025-26).
Key Financial Benefits and Subsidy Details
PMEGP scheme provides massive financial support to those who want to set up micro-enterprises. It provides subsidy in the form of ‘margin money’.
- Margin Money Subsidy
Based on the total cost of the project and the category of the beneficiary, a subsidy of 15% to 35% is provided on bank loans.
This is a part of the loan amount given to the beneficiary, which is paid directly to the bank by the government after the project is reviewed.
- Loan Limits
The maximum loan limits under the scheme are as follows:
Manufacturing sector: Eligible for a loan of up to Rs. 50 lakhs.
Key Feature: No collateral (security) is required for loans up to Rs. 10 lakhs under the scheme.
Key Feature: No collateral (security) is required for loans up to Rs. 10 lakhs under the scheme.
- Category-wise subsidy details
The subsidy amount and beneficiary share based on the category and location of the applicant in the PMEGP scheme are as follows:
General Category:
In urban areas: Beneficiary’s own share will be 10%, Government subsidy will be 15%, and bank loan will be 75%.
In rural areas: Beneficiary’s own share will be 10%, Government subsidy will be 25%, and bank loan will be 65%.
Special Category (SC/ST, Women, Minorities, Ex-Servicemen, Disabled, etc.):
In urban areas: Beneficiary’s own share will be 5%, Government subsidy will be 25%, and bank loan will be 70%.
In rural areas: Beneficiary’s own share will be 5%, Government subsidy will be 35%, and bank loan will be 60%.
Key Eligibility Criteria for PMEGP Scheme
The following criteria must be met to be eligible for this scheme:
Age: Any person above 18 years of age can apply.
Institutions: Self-help groups, cooperative societies, and religious trusts are also eligible to apply.
Educational Qualification:
For manufacturing projects above Rs. 10 lakh and for service projects above Rs. 5 lakh, the applicant must have passed at least 8th standard.
Scheme Nature: This is applicable only for setting up of new units (not for expansion or modernization).
Which industries will be supported?
The PMEGP scheme will support a wide range of industries in the non-farm sector. The major sectors and industries are:
- Food and agro-based industries: Bakery products and confectionery manufacturing, jam, jelly and pickle manufacturing, spice manufacturing units, dairy and milk products, and rice and flour mills.
- Forest-based and handicraft industries: Bamboo products manufacturing, broom manufacturing, beekeeping and Ayurvedic medicine manufacturing.
- Textiles and other products: Textiles and readymade garments, dyeing and printing units, handmade paper, jute and coir products.
- Service sector: Electronics and vehicle repair services, beauty parlours, tailoring, computer and IT services, and printing businesses.
- Other eligible sectors: Chemical and polymer-based products such as rubber molding, adhesive tapes, and detergent manufacturing. Waste management and recycling plants, cold storage facilities, and related products such as cement and fly ash bricks are also eligible.
Entrepreneurship Development Programme (EDP) Training
An important and mandatory part of the PMEGP scheme is the Entrepreneurship Development Programme (EDP) training.
After the PMEGP loan is sanctioned, the beneficiaries are required to attend this 10-day training.
It is conducted by KVIC, KVIB, DICs or other government approved training centres.
Release of subsidy: Margin money subsidy can be released only after successful completion of EDP training.
Topics of training: It covers important topics like business planning, accounting, market studies, production management and regulatory compliance.
Second Loan and Upgradation Scheme
Second loan facility is available for expansion and modernization for successful entrepreneurs.
Purpose: Financial assistance for expansion, modernization or diversification of businesses.
Loan limit: Loan up to Rs. 1 crore is available for upgradation.
Subsidy: 15% subsidy is available for general category and 20% subsidy is available for special category (women, ex-servicemen, disabled and NER category).
Beneficiary share: Beneficiaries have to bear 10% of the total cost of the scheme themselves.
How to apply for PMEGP scheme?
The application process has been simplified online and the approval process is completed within 30 to 45 days.
- Visit the portal: Visit the official PMEGP portal. Official link: https://www.kviconline.gov.in/pmegp/
- Start the application: Click on ‘Apply for New Unit’ on the portal.
- Fill in the information: Fill in the personal, business and project information like Aadhaar, name, address, project cost, business activity and the bank of your choice in the online application.
- Upload documents: Scan the required documents and upload them.
- Submission: After submitting the application, an application ID or PMEGP ID is generated.
- Verification: The District Industries Centre (DIC) or KVIC/KVIB offices will verify and then forward the application to the bank of your choice.
- Loan and Subsidy Release: After the bank loan is approved, the margin money subsidy is received from KVIC and released to the beneficiary after EDP training.
Documents required for application
The important documents that you need to upload to apply for PMEGP loan are:
- Aadhaar card and PAN card.
- Passport-size photograph.
- Educational qualification certificate (8th class pass certificate, as applicable).
- Caste or community certificate (for SC/ST/OBC/Minority/Women applicants).
- Physical disability certificate (where applicable).
- Detailed Project Report (DPR) containing cost breakdown and revenue projection.
- Bank account details and passbook copy.
- Reference letter for machinery/equipment to be purchased.
- Lease agreement or ownership documents of proposed business premises.
- EDP certificate of training (if already done).
- Consent letter from co-applicants or partners (in case of group applications).