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Prime Minister’s Employment Generation Programme (PMEGP) is a program developed by the government for citizens who wish to start their own business. It is a scheme that aims to generate more employment opportunities in the urban as well as rural areas of the country.
Under this scheme, the government offers a subsidy that is between 15 to 35 percent of the total business/project cost. The exact percentage will depend on the location where the applicant lives and the category of the proposed business.
The beneficiary has to invest and contribute 5 to 10% of the total cost. The rest of the amount can be taken through banks.
Let’s understand this scheme in detail.
About PMEGP Loan Apply Online
Feature | Details |
|---|---|
Repayment Tenure | 3 to 7 years |
Age Criteria | Above 18 years |
Maximum Project Cost (First PMEGP Loan) | Manufacturing sector: Rs 50 lakhs, and Service: Rs 20 lakhs |
Maximum Project Cost (Second PMEGP Loan) | Manufacturing sector: Rs. 1 crore, and Service: Rs 25 lakhs |
Subsidy on Project | 15% to 35% |
Lock-in Period for Government Subsidy | 3 years after successful physical verification |
Applicant's Education Qualification (Project Cost Over Rs 10 lakhs) | Manufacturing: At least 8th class pass |
Applicant's Education Qualification (Project Cost Over Rs 5 lakhs) | Service/Business: At least 8th class pass |
What is the PGEMP Scheme – Overview
The government has implemented the PGEMP scheme. It is administered by the Union Ministry of Micro, Small and Medium Enterprises (MoMSME). In order to promote and encourage people in rural as well as urban areas to undertake self-employment, this scheme was introduced.
It provides subsidies so that people can start their own ventures and also generate employment for others.
To be eligible for a subsidy, businesses must invest less than Rs 50 lakh in manufacturing or Rs 20 lakh in services. For units with a project cost higher than these limits, the remaining credit can be obtained from banks without any government subsidy.
Manufacturing units can get a second PMEGP loan of up to Rs 1 crore. For service units, it's Rs 25 lakh.
For second PMEGP loans, the maximum subsidy is capped at Rs.15 lakh for manufacturing units and at Rs.3.75 lakh for service units. This is Rs. 20 lakhs and Rs. 5 lakh for the NER or Hill States for manufacturing and service units respectively.
Recommended Read: Government Schemes Experian, Equifax, Credit Report
How to Apply for PMEGP Loan Online?
- Step 1: Want to benefit from PMEGP? Visit the official PMEGP website and hit the button saying "Apply" for new units.
- Step 2: Carefully fill out the form that appears and click "Save Application Data."
- Step 3: Note your application ID and password.
- Step 4: Click "Proceed" to upload your documents.
- Step 5: Click "Score Card" to estimate your loan chances.
- Step 6: Answer questions, check the box, and click "Save."
- Step 7: Go to the "EDP" section and choose your training method.
- Step 8: Click "Final Submission of Application to Sponsoring Agency."
- Step 9: Print the application, attach photocopies of all documents, and visit the chosen bank.
- Step 10: Submit the application and documents to the bank. Wait 30-45 days for a response regarding loan approval.
PMEGP Loan Eligibility Criteria
- Age: Must be 18 years or older.
- Education: At least 8th grade pass.
- Business: Loan must be for a new business. Existing businesses are not eligible.
- Income: There is no income limit.
Documents Required for PMEGP Loan
- Passport-sized photo
- Detailed and professionally prepared business plan or project report
- Caste certificate (if applicable)
- Aadhaar card
- Population certificate (attested)
- Education certificates
- PAN card
- Residential address proof
- Business address proof
- Family income proof
- MSME registration
- Income Tax Returns (past 3 years)
Businesses That Not Allowed Under PMEGP Scheme
- Any industry or business involved in meat production, processing, or serving.
- Production or sale of intoxicating items (cigars, beedis, pan, cigarettes)
- Hotels, dhabas, or outlets serving liquor
- Preparation or production of tobacco
- Tapping toddy for sale (except serving or selling non-vegetarian food at hotels or dhabas)
- Activities prohibited by local governments or authorities due to environmental or socioeconomic factors
- Manufacturing of polythene carry bags less than 75 microns thick
- Manufacturing of carry bags or containers made of recycled plastic for food or other items
- Industries or businesses connected with crop or plantation cultivation (tea, coffee, rubber, horticulture, floriculture, animal husbandry, sericulture) (except value addition or off-farm/farm-linked activities)
Permitted Animal Husbandry Activities:
- Dairy: Milk and dairy products sourced from a variety of animals, such as cows, sheep, goats, horses, camels, buffaloes, and donkeys.
- Poultry: Turkeys, geese, chickens, and ducks.
- Aquaculture: Farming of aquatic organisms (mollusks, crustaceans, fish, aquatic plants).
- Insects: Bees, sericulture, etc.
- Piggery: Allowed only in North East Region states.
How to Check PMEGP Online Application Status
- Step 1: To apply as a registered applicant, go to the PMEGP website and select "Apply."
- Step 2: Use the login form that appears on the screen to continue.
- Step 3: Enter your User ID, password, and click "Login." If you forgot your password, click "Forgot Password" to reset it.
- Step 4: On the next page, click "View Status" to check your PMEGP loan status.
FAQs on PMEGP Loan Apply
1. How do I apply for a PMEGP loan?
Visit the PMEGP portal to apply for the loan and provide all the necessary details.
2. What is the interest rate for a PMEGP loan?
Each bank sets its own interest rate based on its credit policies.
3. What is margin money in PMEGP?
It's a subsidy ranging from 15% to 35% of the project cost, depending on your category and location.
4. Who is eligible for a PMEGP loan?
To be eligible for a PMEGP loan, an individual must be at least 18 years old and possess a valid Aadhaar number. There is no income ceiling for applying. However, for projects costing over ₹10 lakh in the manufacturing sector or over ₹5 lakh in the service/business sector, a minimum educational qualification of VIII standard is required. The scheme is only for new, viable projects and does not cover existing units or those that have received government subsidies previously. Additionally, the cost of land is not eligible for coverage under the loan.
5. Which banks offer PMEGP loans?
All public sector banks, Regional Rural Banks (RRBs), SIDBI, co-operative banks, and private scheduled commercial banks approved by the RBI and state SLMCs can offer PMEGP loans.
6. What is the PMEGP subsidy?
It's a margin money subsidy ranging from 15% to 35% of your project cost, depending on your category and location. You receive the subsidy after 3 years upon successful physical verification, which is the lock-in period.
7. What is the maximum limit of PMEGP loan?
The maximum limit for a PMEGP loan is ₹50 lakh for manufacturing projects and ₹25 lakh for service sector projects. This scheme aims to provide financial assistance to boost small businesses and create employment opportunities.
8. How do I submit a PMEGP application?
To submit a PMEGP application, visit the official PMEGP e-portal https://www.kviconline.gov.in. Register as a new user by providing your personal details, select your preferred agency (KVIC, KVIB, or DIC), and fill out the application form. Upload the necessary documents, such as ID proof, project report, and caste certificate (if applicable), then submit the form online for processing.
9. How do I check my PMEGP application status?
To check your PMEGP application status online, follow these simple steps:
- Visit the official PMEGP website at www.kviconline.gov.in
- Click on the "PMEGP" tab on the homepage
- Select "Registered Applicant" and click on the “Login” button
- Enter your User ID and Password
- Click on the “Current Status” menu to view your application status.
10. Is the loan provided immediately, or do I need to wait for the subsidy?
The loan is provided by the bank immediately, while the subsidy from the government will be granted after 3 years.
11. What is the benefit of applying for a loan today if the subsidy is only received after 3 years?
The scheme is government-backed, ensuring that the loan is available at lower interest rates. This makes it beneficial for customers even if the subsidy is received later.