MSME & Government Schemes
PMEGP Loan (2026): Own Contribution, Eligibility, Documents & Subsidy — Apply Online
PMEGP loan details — own contribution, eligibility, documents required, is it collateral free, subsidy 15–35%, loan amount up to ₹50 lakh (₹20 lakh service) + second loan. Apply online on PMEGP portal.
What is PMEGP loan? PMEGP scheme loan details
What is PMEGP loan? PMEGP loan is the bank loan under the PMEGP loan scheme — the Prime Minister’s Employment Generation Programme, a government subsidy loan for business run by the Ministry of MSME and implemented nationally by KVIC via KVIB/DIC. Instead of borrowing the full project cost, you fund a small own contribution, the bank lends the rest, and the government gives margin-money subsidy (15–35%) that becomes your capital.
PMEGP loan details at a glance: funds new micro-enterprises only (manufacturing or service/business), no income ceiling, age 18+, one person per family. PMEGP govt subsidy makes it one of the most popular government subsidy loans alongside MUDRA — but with a subsidy, not just a guarantee.
PMEGP own contribution — how much you put in
| Category | Urban subsidy | Rural subsidy | PMEGP own contribution |
|---|---|---|---|
| General | 15% of project cost | 25% of project cost | 10% of project cost |
| Special (SC/ST, OBC, minorities, women, transgender, ex-servicemen, differently abled, NE/hill/border, aspirational districts) | 25% of project cost | 35% of project cost | 5% of project cost |
PMEGP own contribution is the answer to 5-impression queries — General 10%, Special 5%. Example: ₹10 lakh General rural project: you (own contribution) ₹1 lakh (10%), PMEGP subsidy ₹2.5 lakh (25%), bank loan ₹6.5 lakh. Subsidy is locked in the business for 3 years as your capital, not cash in hand.
PMEGP loan amount: how much can you get?
PMEGP loan amount is the project cost you can fund — subsidy is on top, so sanctioned loan is project cost minus own contribution and margin money.
| Parameter | Manufacturing unit | Service / business unit |
|---|---|---|
| Maximum project cost (new units) — PMEGP loan amount | ₹50 lakh | ₹20 lakh |
| Working capital share of project cost | Up to 40% | Up to 60% |
| Second loan for upgradation (existing PMEGP/MUDRA units) | Up to ₹1 crore | Up to ₹25 lakh |
Project cost covers capital expenditure plus one cycle of working capital. Your bank finances the balance after own contribution and subsidy. Repayment 3–7 years, interest set by bank.
PMEGP loan eligibility
- Any individual 18+ — no income ceiling — PMEGP loan eligibility for first-time entrepreneurs.
- Self-Help Groups, societies, charitable trusts, cooperatives also eligible.
- Only new, viable projects — existing subsidy-availed businesses not eligible.
- Education: VIII standard required for >₹10 lakh manufacturing or >₹5 lakh service.
- One person per family, unit must be family’s primary livelihood.
- Existing PMEGP or MUDRA unit can take second loan for upgradation.
Will PMEGP get loan for travel and tourism sector? Yes if the project is a viable service/business unit (e.g., tour operator, homestay, transport service) and not in the negative list — service units are eligible up to ₹20 lakh (₹25 lakh second loan). Slipper making (footwear) is a classic Village Industries manufacturing activity eligible — did government provide loan to start slipper business? Yes via PMEGP for new units.
Documents required for PMEGP loan — PMEGP loan documents
- Aadhaar card (mandatory for PMEGP portal authentication) + mobile number — PMEGP loan documents required core.
- Passport-size photograph and proof of age (Aadhaar/birth/matric certificate).
- Category certificate if Special (SC/ST, OBC, minority etc.) for higher subsidy and 5% own contribution.
- Project report with cost break-up — documents required for PMEGP loan most asked.
- Educational qualification (VIII standard+) if project above ₹10 lakh manufacturing / ₹5 lakh service.
- Bank account details for disbursement.
- Udyam Registration for the new unit — mandatory before physical verification on the portal.
Keep these PMEGP loan documents ready before you start on the PMEGP portal — the portal asks during submission and the nodal bank verifies later. Regional language forms are at DIC/KVIC, but online submission is via the central portal.
Is PMEGP loan collateral free? Is collateral required?
Is PMEGP loan collateral free? Yes — PMEGP projects up to ₹10 lakh are collateral free per RBI norms: is collateral required for PMEGP loan — no collateral required up to ₹10 lakh. Above ₹10 lakh, CGTMSE covers the loan, so bank does not ask for third-party guarantee.
CGTMSE guarantee cover is up to ₹10 crore per borrower (raised from ₹5 crore 1 Apr 2025). For PMEGP loans ₹10–50 lakh, Annual Guarantee Fee is 0.55% p.a. with 10% concession for social categories. This is why PMEGP is a government subsidy loan with collateral relief.
PMEGP portal, login and applying online (HDFC and other banks)
PMEGP portal is kviconline.gov.in/pmegpeportal — not HDFC’s site. HDFC, SBI and other banks are nodal lending banks that sanction PMEGP loans sourced via the portal. Search `hdfc PMEGP` lands you at the same KVIC portal + HDFC bank sanction.
- Open PMEGP portal kviconline.gov.in/pmegpeportal and register with mobile.
- Complete Aadhaar authentication via UIDAI — mandatory.
- Receive User ID/password by SMS.
- Login, fill project details, category and location (rural/urban).
- Upload PMEGP loan documents (Aadhaar, photo, age proof, category, project report, education, bank details).
- Fill score card, verify and submit — note application ID to track status.
- Nodal bank (including HDFC where empaneled) sanctions, then you complete EDP training before subsidy release.
Track status online with application ID; Udyami app sends SMS updates. Regional language help is at DIC/KVIB if needed.
PMEGP interest rate and repayment
PMEGP does not fix interest — lending bank sets it; subsidy lowers effective cost. SBI priced PMEGP loans at 12.15% p.a. (EBLR + 3.25%) Feb 2025 ⚠️. Your rate depends on MCLR/EBLR and tenor.
Repayment 3–7 years; margin-money subsidy is a grant locked in for 3 years, not repaid.
EDP training: compulsory after sanction
After sanction, complete Entrepreneurship Development Programme (EDP) training before subsidy release — free, online on Udyami portal.
- Projects above ₹5 lakh: 10 working days EDP.
- Projects up to ₹5 lakh: 5 working days.
- Projects up to ₹2 lakh: exempt from mandatory training.
- Special categories/women/differently abled can use free online EDP.
From a PMEGP unit to trade: what comes next
PMEGP funds your first unit — but many entrepreneurs take the micro-enterprise into exports or start importing machinery. That is where trade finance takes over from the subsidy world.
If your PMEGP unit starts selling overseas, export factoring advances cash on shipped invoices in days instead of waiting 60–90 day buyer credit. If buyer insists on LC, LC discounting advances cash before LC matures.
Financing your next trade deal
Check your buyer country for factoring and LC discounting coverage, and get a recommendation before you negotiate payment terms.
Open the financing checkerFrequently asked questions
What is PMEGP loan?
PMEGP loan is the bank loan under the Prime Minister’s Employment Generation Programme — a Ministry of MSME credit-linked subsidy scheme implemented by KVIC via KVIB/DIC. Govt gives margin-money subsidy (15–35%) so you fund only own contribution (5%/10%) and bank funds the rest for a new micro-enterprise.
What is PMEGP own contribution?
Your own contribution under PMEGP is 10% of project cost for General category and 5% for Special categories (SC/ST, OBC, minorities, women, transgender, ex-servicemen, differently abled, NE/hill/border areas, aspirational districts). Example: ₹10 lakh General rural project: you put ₹1 lakh (10%), subsidy ₹2.5 lakh (25%), bank loan ₹6.5 lakh.
What are PMEGP loan details — amount, subsidy and repayment?
New unit: up to ₹50 lakh manufacturing, ₹20 lakh service/business (includes 1 cycle working capital). Subsidy (margin money): General 15% urban / 25% rural; Special 25% urban / 35% rural. Second loan for existing PMEGP/MUDRA units: up to ₹1 crore manufacturing / ₹25 lakh service. Repayment 3–7 years, interest set by bank (e.g., SBI ~12.15% p.a. EBLR+3.25% Feb 2025 ⚠️).
Who is eligible for PMEGP loan? PMEGP loan eligibility?
Any individual 18+ years, no income ceiling, for a new viable project. VIII standard pass required for >₹10 lakh manufacturing or >₹5 lakh service. One person per family. SHGs, societies, trusts, cooperatives also eligible. Existing subsidy-availed businesses not eligible, but PMEGP/MUDRA units can take second loan for upgradation.
What documents are required for PMEGP loan? PMEGP loan documents?
Aadhaar (mandatory for portal), photo, age proof, category certificate if Special, project report, educational certificate (if above limit), bank account details and Udyam registration for the new unit before verification. Aadhaar authentication is mandatory on the PMEGP portal.
Is PMEGP loan collateral free? Is collateral required?
PMEGP is collateral free up to ₹10 lakh per RBI norms — no collateral required. Above ₹10 lakh, CGTMSE covers the loan (up to ₹10 crore cover from 1 Apr 2025); Annual Guarantee Fee for ₹10–50 lakh is 0.55% p.a. with 10% concession for social categories. Hence is PMEGP loan collateral free — yes, up to ₹10 lakh, and CGTMS E-backed beyond.
How to apply on PMEGP portal? PMEGP portal login?
PMEGP portal is kviconline.gov.in/pmegpeportal (KVIC). Register with mobile, Aadhaar authenticate via UIDAI, get User ID/password by SMS, login, fill project details, upload PMEGP loan documents, fill score card and submit. Track status online with application ID; SMS updates also via Udyami app.
Will PMEGP give loan for travel and tourism sector? Did government provide loan for slipper making?
PMEGP funds new micro-enterprises in manufacturing, service and business including eligible service activities like tourism-related services where viable. Travel and tourism service units can be considered if the project is service-oriented (e.g., tour services, hospitality) and not in the negative list. Slipper making (footwear manufacturing) is a typical manufacturing activity eligible under PMEGP — e.g., slipper/chappal unit under Village Industries. Check negative list and DIC/KVIC local list before applying.
What is PMEGP subsidy and government subsidy loan for business?
PMEGP subsidy (margin money) is Government of India subsidy loan support for business — 15% urban/25% rural General, 25% urban/35% rural Special on project cost, locked 3 years as your capital. This is the government subsidy loan most queries mean — distinct from MUDRA/CGTMSE which are guarantee/loan, not subsidy.
What is full form of PMEGP and is it a govt scheme?
PMEGP = Prime Minister’s Employment Generation Programme — yes, a Ministry of MSME govt scheme (PMEGP govt) implemented nationally by KVIC. One of the main government subsidy loans for new micro-enterprises alongside MUDRA and CGTMSE.