Ministry of Micro, Small & Medium Enterprises (MSME) — Implemented by KVIC
PMEGP 2026 — Start Your Own Business with Up to ₹50 Lakh Subsidy Loan
Objective
Generate employment in rural and urban areas by helping individuals start new micro-enterprises through a combination of bank loan and government subsidy — with no collateral requirement on the government subsidy portion.
Eligibility Criteria
- Any individual aged 18 years or above
- No income ceiling — anyone can apply regardless of their current income
- For projects above ₹10 lakh (manufacturing) or ₹5 lakh (service), minimum Class VIII pass required
- Only NEW projects are eligible — existing businesses or previous subsidy recipients under PMRY/REGP are NOT eligible
- Non-farm sector activities only (agriculture is excluded)
- Institutions: SHGs, production co-operative societies, charitable trusts also eligible
Benefits & Features
- 1Government subsidy 15–35% of project cost — no repayment required on subsidy portion
- 2Manufacturing sector: maximum project cost ₹50 lakh
- 3Service/business sector: maximum project cost ₹20 lakh
- 4General category: 15% subsidy (urban) / 25% subsidy (rural) of project cost
- 5Special categories (SC/ST/Women/Ex-Servicemen/Minorities/PH): 25% (urban) / 35% (rural)
- 6NE Region / Hill / Border areas: 25% (urban) / 35% (rural)
- 7Bank provides term loan for balance (90% for general, 95% for special categories)
- 889,118 enterprises supported in 2023-24 alone; over 4 lakh enterprises created since 2021
Required Documents
- Aadhaar card
- PAN card
- Educational qualification certificates (Class VIII onwards)
- Caste certificate (for SC/ST/OBC applicants)
- Detailed project report / business plan
- Bank account details and 3-6 months bank statements
- EDP (Entrepreneurship Development Programme) training completion certificate
- Declaration that no prior government subsidy has been received under any scheme
How to Apply
Frequently Asked Questions
| What is the maximum subsidy I can get under PMEGP? | Up to 35% of project cost for special categories (SC/ST/Women/Ex-Servicemen/PH) in rural areas. For a ₹50 lakh manufacturing project, that's ₹17.5 lakh in non-repayable subsidy. |
| Is PMEGP only for people who are unemployed? | No. There is no income or employment criterion. Any Indian citizen aged 18+ can apply, as long as they are starting a new project and haven't received government subsidy for a previous venture. |
| What is EDP training and is it mandatory for PMEGP? | EDP (Entrepreneurship Development Programme) is a free 3-7 day training on running a business. It is mandatory for PMEGP — you need the completion certificate before your loan can be sanctioned. |
Official Portal & Helpline
Get instant scheme updates — join our channels:
What PMEGP Is
PMEGP — Prime Minister's Employment Generation Programme — is one of India's most impactful self-employment schemes. If you want to start a small business but don't have enough capital, PMEGP bridges the gap with a combination of bank loan + government subsidy.
The subsidy portion — 15% to 35% of your project cost — never needs to be repaid. You repay only the bank loan portion. And there is no collateral on the subsidy portion.
Since 2021-22, PMEGP has supported over 4 lakh micro-enterprises and generated around 36 lakh jobs across India.
How the Funding Works
Let's say you're a woman from a rural area applying for a ₹10 lakh manufacturing project:
| Component | Amount |
|---|---|
| Your contribution (5% for special category) | ₹50,000 |
| Government subsidy (35% rural for special category) | ₹3,50,000 |
| Bank loan (95% of project — including your 5%) | ₹9,50,000 |
| Total project cost | ₹10 lakh |
The subsidy of ₹3.5 lakh is locked in a Term Deposit Receipt (TDR) with the bank. After you repay the loan for 3 years without default, the subsidy is credited to your account.
Subsidy Rates by Category and Location
| Category | Urban Subsidy | Rural Subsidy |
|---|---|---|
| General category | 15% | 25% |
| SC / ST / Women / Ex-Servicemen / Minorities / PH / NE Region / Hill / Border | 25% | 35% |
Beneficiary contribution:
- General: 10% of project cost
- Special categories: 5% of project cost
Project Cost Limits
- Manufacturing sector: Up to ₹50 lakh
- Service/business sector: Up to ₹20 lakh
For second loans (PMEGP beneficiaries who have repaid and want to expand): up to ₹1 crore (manufacturing) and ₹25 lakh (service).
What Kind of Business Can You Start?
PMEGP covers almost all non-farm activities:
- Food processing (bakery, dairy, pickle, murabba, papad)
- Garment stitching and textiles
- Handicrafts and handloom
- Electronics repair and assembly
- Furniture making
- Agarbatti / candle / soap / cosmetics manufacturing
- Computer training centres, coaching institutes
- Automobile repair workshops
- Catering and food stalls
- Logistics and delivery services
Not covered: Pure agriculture/farming, grocery shops, liquor, and activities on the official negative list.
EDP Training — Mandatory
Before getting the loan sanctioned, you must complete an Entrepreneurship Development Programme (EDP) — a short training (typically 3-7 days) on running a business. This is conducted by KVIC, KVIB, or District Industries Centres. It's free, and the certificate is required for your application.
How to Apply
- Go to kviconline.gov.in/pmegp/
- Register and fill the online application form
- Enter your personal details, project details, and upload documents
- Select your implementing agency (KVIC / KVIB / DIC) and bank
- Submit the application — you'll get a reference number
- The implementing agency and bank will review and call you for an interview
- Bank sanctions the loan → you receive the sanctioned amount minus your contribution
- After 3 years of regular repayment → subsidy released
Common Questions
Can I apply if I'm already running a small business? No. PMEGP is only for new projects. If you already have a business, you're not eligible. (However, if you're a previous PMEGP beneficiary who has fully repaid the first loan, you can apply for a second loan for expansion.)
I got a subsidy under PMRY some years ago. Can I apply for PMEGP? No. Previous beneficiaries of government subsidy schemes like PMRY, REGP, or state-level schemes are not eligible.
Is EDP training free? Yes, completely free. It's conducted by KVIC, KVIB, or DICs.
How long does the approval process take? Typically 30-90 days from application to loan sanction, depending on the bank and the completeness of your project report.
Can women get a higher subsidy? Yes. Women fall in the "special category" and get 25% subsidy in urban areas and 35% in rural areas — 10 percentage points higher than the general category.
Official Links
| PMEGP Portal | kviconline.gov.in/pmegp/ |
| Apply Online | kviconline.gov.in/pmegpeportal/pmegphome/index.jsp |
| MSME Ministry | msme.gov.in |
| KVIC | kvic.gov.in |
| Helpline | 1800-3000-0034 (toll-free) |