PMEGP Scheme Details

PMEGP Scheme: Full Form, Application, Interest Rate, Eligibility

Prime Minister's Employment Generation Programme (PMEGP)

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A credit-linked subsidy program initiated in 2008, the Prime Minister’s Employment Generation Programme (PMEGP), is offered by the Government of India. The scheme enables a subsidy on several projects depending on various criteria, and the interest rate is between 11% and 12%.

What is PMEGP Scheme

PMEGP stands for the Prime Minister’s Employment Generation Programme; credit-linked subsidy programme first launched in 2008. The PMEGP came about to merge two previous similar government schemes that shared similar goals and benefits - the Prime Minister’s Rozgar Yojana and the Rural Employment Generation Programme. The prime objective of these two programs and the PMEGP scheme is to provide much-needed financial encouragement to Indian entrepreneurs in rural and urban sectors to set up their businesses and enterprises.


As a result of these initiatives, the program strives to foster employment among the country’s youth and aid the community with new ventures. The administration of the PMEGP is handled by the Ministry of Micro Small and Medium Enterprises, while the Khadi and Village Industries Commission governs the implementation on the national level. On the district level, the scheme is handled by district industries centres and banks.

Objectives of PMEGP Scheme

Below we have mentioned the key objectives of the PMEGP loan:


  • Generating employment opportunities in India's rural and urban areas by setting up various new projects, micro-enterprises, and ventures.

  • Providing a common structure and source of self-employment opportunities for artisans and sections of unemployed youth spread across the country.

  • To eliminate the need for rural people to migrate and seek employment opportunities in urban areas by providing them with stable modes of employment within their region. This goes a long way in aiding traditional artisans and sections of unemployed youth who only manage to secure seasonal employment in a year.

  • To help boost artisans' income-earning opportunities and capacity and increase the employment rate in rural and urban areas.

PMEGP Loan Eligibility Criteria

The PMEGP scheme strives to make a substantial improvement in the employment and entrepreneurship landscape of the country. It follows that the PMEGP loans have specific criteria for budding entrepreneurs or businesses that may be eligible for this beneficial opportunity. Here is a comprehensive list of individual and organisation criteria that determine the eligibility of the PMEGP loan scheme.

  • If the beneficiary is an individual, he or she must be above 18 years of age.

  • For individuals seeking a PMEGP loan for a project cost above Rs. 10 Lakhs within the manufacturing sector, he or she must have studied and passed at least Class 8. The same loan criteria apply for project costs above Rs. 5 Lakhs within the business or service sector.

  • Self-help groups are also eligible for PMEGP loans. This is, however, contingent on the condition that the group has not availed any benefits under any other scheme.

  • Societies registered under Societies Registration Act, 1860 are eligible for PMEGP loans.

  • Co-operative Societies involved in production businesses.

  • Charitable Trusts

PMEGP Bank List 2022

Below we have tabulated the leading financial institutions that support funding assistance as part of the PMEGP scheme.

IDFC First Bank

Bank of Baroda

Indian Bank

Bank of India

Kotak Mahindra Bank

Canara Bank

Punjab National Bank

Central Bank of India

State Bank of India

HDFC Bank Ltd.

UCO Bank

ICICI Bank Ltd.

Union Bank of India

Axis Bank

How to Apply for PMEGP Loan Online

Finally, on checking your eligibility criteria and collecting all the necessary documents, all that remains in the process of availing the PMEGP loan is the application process. Here are the simple steps you need to follow while making a PMEGP online application:


  • Start by logging on to the official E-portal page of the PMEGP scheme on the KVIC website online.

  • Click on the applicable option available on the page - individual or non-individual - and you will be directed to an online application form.

  • Fill out the relevant details on the form.

  • When completed, click the ‘Save Applicant Data’ button at the bottom of the page.

  • The last step will require you to upload the necessary documents and submit the application.

  • You will receive all application related details on the contact details you provide. The applicable PMEGP loan for you will subsequently be processed.

Documents Required for PMEGP Loan

After ascertaining whether an individual or organisation meets the eligibility criteria listed above, they can move on to the next step - collecting the necessary documents for the PMEGP loan application process. Here is a comprehensive list of the documents you will require before applying for a PMEGP loan:


  • Application form with passport-sized photographs

  • Identity & Address Proofs

  • PAN card, Aadhaar card & VIII Pass certificate

  • Project Report

  • Special category certificate, if required

  • Certificate of Entrepreneur Development Programme (EDP)

  • Caste Certificate for SC/ST/OBC/Minority/Ex-Servicemen/PHC

  • Certificate of academic and technical courses, if any

  • Any other documents required by the bank or NBFC

What Does a PMEGP Loan Offer

Under the PMEGP scheme, the PMEGP loan is a type of term loan offered to entrepreneurs at a specific rate and subsidies on their overall project cost. The exact specifics of a PMEGP loan vary based on a number of factors. Here are some of the more essential details about how much financial assistance a PMEGP loan offers:


  • Loan Amount: The Government of India offers PMEGP loan amounts based on the sector and the overall project cost. PMEGP Loan amounts are offered up to Rs. 10 Lakhs for projects in the business or service sectors. For projects in the manufacturing sector, this loan amount is capped at Rs. 25 Lakhs.

  • Self Investment: The PMEGP loan scheme also requires a share of self-investment in the project from the entrepreneur. For the General category, this share is marked at 10%, while for the Special category, this share is 5%. Hence, the government can sanction as much as 90 to 95% of your project if it falls within the upper limit.

  • Subsidy (Rural): Along with the PMEGP loan, the scheme also offers a certain percentage of subsidy or margin money for your project. For rural enterprises, this subsidy percentage is 25% for the General category and 35% for the Special category.

  • Subsidy (Urban): For urban enterprises, the subsidy percentage is 15% for the General category and 25% for the Special category. Apart from these varying factors, all PMEGP loans incur regular interest rates of around 11-12% per annum. Also, the tenure for repayment of a PMEGP loan can be around 3 to 7 years, with a moratorium period of 6 months. As for collateral, all PMEGP loans up to Rs. 10 Lakhs do not require any form of security, as per guidelines from the Reserve Bank of India.

The PMEGP loan might provide a much-needed source of credit for many individuals and businesses around the country. However, businesses often have growing needs and might still need additional financial aid. You can consider availing one of the many customisable business loans available at Bajaj Markets today. The Bajaj Finance Business Loan available on Bajaj Markets, can be availed through a completely online process. For your convenience, the process has been made even easier through features such as minimal documentation, instant approval, and swift disbursal.

FAQs on PMEGP Loan

  • ✔️What is the full form of PMEGP?

    The full form of PMEGP is Prime Minister Employment Generation Programme.

  • ✔️Is collateral required for a loan under PMEGP?

    The collateral requirement under PMEGP is subjective. There is no collateral required if the project cost is less than ₹ 10 Lakh under the PMEGP scheme. CGTMSE provides a collateral guarantee for projects beyond ₹ 5 Lakh and up to ₹ 25 Lakh as part of the PMEGP scheme.

  • ✔️What is a PMEGP subsidy?

    The PMEGP subsidy is a credit-linked subsidy that the Government of India offers. As part of the subsidy, beneficiaries receive a subsidy of anywhere from 15% to 35% on the project's total cost. Individuals and MSMEs across the country can avail the subsidy.

  • ✔️What is PMEGP loan interest rate?

    The interest rate applied on the PMEGP loan varies from lender to lender.

  • ✔️What is the PMEGP loan limit?

    As part of PMEGP, the set loan limit is ₹ 25 Lakh for a manufacturing unit and ₹ 10 Lakh for a service unit.

  • ✔️Who can apply for a PMEGP loan?

    Any person who has passed the VIII standard can apply for loans as part of the PMEGP scheme. Other entities that can apply for a loan under the scheme include Self-help Groups, Charitable Trusts, Societies registered under Societies Registration Act, 1860, and Production Co-operative Societies.