Everything you need to know about PMEGP for your business

As a business owner, you might run into capital-related issues. Arranging for adequate capital can be challenging for newer businesses. Keeping that in mind, the Government of India launched the Prime Minister’s Employment Generation Programme (PMEGP). Nascent companies can seek financial assistance from PMEGP to keep their operations running smoothly. To learn more about the PMEGP scheme and how you can apply for the same, continue reading.

What is PMEGP?

PMEGP is a scheme that offers financial assistance to those who want to set up new enterprises. The nodal agency that implements the scheme nationally is the Khadi and Village Industries Commission (KVIC). The scheme is implemented by the KVIC, directorates, District Industries Centres, State Khadi and Village Industries Board, and banks at the state level.

As per the PMEGP guidelines, the maximum amount that is disbursed within the manufacturing sector is limited to  ₹25 lakh. On the other hand, the limit for the service/business sector is set at  ₹10 lakh.

If you are a beneficiary falling within the general category, your share of the total project will be 10%. The government’s subsidy rate will be 15% for urban areas and 25% for rural areas. However, if you fall within the special category, your share of the total project will be 5%. The subsidy rates will also change to 25% for urban areas and 35%for rural areas.

The remaining amount of the overall project cost will be borne by the banks involved as working capital or term loans.

What are the eligibility criteria for PMEGP?

To apply for the PMEGP loan for new enterprises, you have to fulfil the eligibility criteria given below:

  • You must be of at least 18 years of age.

  • You must have completed your education to at least standard VII (if you seek funds above  ₹5 lakh in the service/business sector and more than  ₹10 lakh in the manufacturing sector).

  • Self help groups (inclusive of those that fall Below Poverty Line (BPL) only if they have not received benefits from any other scheme).

  • Institutions registered under the Societies Registration Act, 1860.

  • Charitable Trusts.

  • Production Co-operative Societies

  • Existing units under REGP, PMRY, or other State or Central Government schemes and those that have availed subsidies under the same cannot qualify for PMEGP.

What is the interest rate on PMEGP loan?

If you are availing of a PMEGP loan, you will also have to pay interest as per the determined rate. The PEMGP interest rate ranges between the usual 11%-12%. You can repay the borrowed loan amount over a tenure ranging from three to seven years following an initial moratorium.

How to apply for the PMEGP loan online?

The divisional/state directors of the KVIC, along with the director of industries of the various states and the Khadi Village Industries Board, release local advertisements. These advertisements are released in print and electronic media. These advertisements aim to invite applications and project proposals from potential beneficiaries who want to establish an enterprise under the programme.


Also Read: Unlocking opportunities: 5 MSMSE Government Schemes for Entrepreneurs



To avail of a loan offered under PMEGP online, you must follow the procedure given below:

  • Visit any one of the following websites: kviconline.gov.in or my.msme.gov.in.

  • When you are directed to the website, click on ‘Prime Minister Employment Generation Programme’ or ‘PMEGP ePortal’.

  • Next, click on ‘Application Form for Individual’. The form will be displayed on your screen.

  • You must choose between two unique application forms, one for the institutional applicant and the other for individuals.x

  • Fill out the form by providing the required details such as name, type of activity, educational qualification, sponsoring agency, bank details, etc.

  • After filling the form, you can click on ‘Save Applicant Data’.

  • Upload the necessary documents and submit the form.

  • Upon doing so, you will receive an application ID and password to your registered mobile number.

Now that you know more about the PMEGP scheme, you can apply for the same to meet your business requirements.

HDFC Bank recognises the challenges entrepreneurs face while acquiring capital. Thus, HDFC Bank has created MyBusiness, a one-stop solution that gives you easy access to loans, digital solutions and provides you with the essential knowledge you need to run your business. With HDFC Bank MyBusiness, you can scale up, expand your operations, and nurture your business.

To learn more about the various products and services at HDFC Bank that can benefit your enterprise, you can check out the MyBusiness page here.

Looking to get credit to finance your business operations? Click here to read more about Credit Guarantee Trust For Micros And Small Enterprises

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.