PMEGP Loan Apply Online: Scheme Details, Subsidy & Eligibility (2026)

What is the PMEGP scheme?

The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme run by the Ministry of MSME to help new entrepreneurs set up micro-enterprises. Instead of borrowing the full project cost, you fund a small share yourself, a bank lends the rest, and the government contributes a subsidy (called margin money) that reduces how much you need to borrow.

The scheme is implemented nationally by the Khadi and Village Industries Commission (KVIC), with the Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) acting as the nodal agencies in every state. Anyone 18 or above can apply for a new unit in manufacturing or services — no income ceiling applies, which is what makes PMEGP one of the most popular government business loan schemes in India.

Two things set PMEGP apart from a normal bank loan. First, the subsidy: up to 35% of the project cost is granted by the government for eligible categories. Second, the collateral relief: projects up to ₹10 lakh are collateral-free, and larger loans are covered by the CGTMSE guarantee.

PMEGP loan amount: how much can you get?

The maximum project cost PMEGP will fund depends on whether your unit is manufacturing or service/business. The subsidy is added on top of the project cost, so the amount you actually receive is the project cost plus the margin money.

The project cost covers capital expenditure plus one cycle of working capital. The bank finances the balance after your own contribution and the PMEGP subsidy are deducted. Loan repayment runs over 3–7 years, and the interest rate is set by the lending bank.

PMEGP subsidy and your own contribution

PMEGP margin money is a grant from the government that is applied against the project cost, reducing the bank loan you need. The percentage depends on two things: your category and whether the unit is in a rural or urban area.

The subsidy is treated as the beneficiary’s own capital and is locked in for three years — you cannot withdraw or divert it in that period. The rest of the project cost is financed by the bank after your own contribution and the margin money are accounted for.

Who is eligible for a PMEGP loan?

• Any individual aged 18 or above — no income ceiling applies.
• Self-Help Groups, societies, charitable trusts and cooperatives are eligible.
• Only new, viable projects qualify; existing businesses that have availed of any other government subsidy are not eligible.
• For projects above ₹10 lakh (manufacturing) or ₹5 lakh (service), a minimum educational qualification of VIII standard is required.
• Only one person per family can avail of the scheme, and the unit must be the family’s primary source of livelihood.
• An existing PMEGP or MUDRA unit can apply for a PMEGP second loan for upgradation of the unit.

Because the unit must be new, PMEGP works best for first-time entrepreneurs — a factory, workshop, service centre or retail/agri-allied unit you are setting up from scratch, not taking over or converting.

Documents required for PMEGP

Keep these documents ready before you start the online application — the portal asks for them during submission and the nodal bank verifies them later:

• Aadhaar card (mandatory for online authentication) and mobile number
• Passport-size photograph
• Proof of age (Aadhaar, birth certificate or matriculation certificate)
• Category certificate, if applying under a special category (SC/ST, OBC, minority, etc.)
• Project report with cost details
• Educational qualification certificates (VIII standard or above, if your project is above the limit)
• Bank account details for the loan account
• Udyam Registration for the new unit (mandatory before physical verification)

PMEGP portal, login and applying online

The entire PMEGP application — registration, submission, tracking and EDP training enrolment — runs on the PMEGP e-portal at kviconline.gov.in/pmegpeportal. There is no offline submission for the online track, though forms in regional languages are available at nodal agencies.

1. Open the PMEGP e-portal and register with your mobile number.
2. Complete Aadhaar authentication through UIDAI — a valid Aadhaar is mandatory.
3. Receive your User ID and password by SMS on your registered mobile number.
4. Login to the portal and fill the application with your project details, category and proposed location.
5. Upload the required documents (Aadhaar, photo, proof of age, category certificate, project report, educational qualification and bank details).
6. Fill in the online score card and verify your details.
7. Submit the application and note the application ID to track your status.
8. Follow up — the nodal bank sanctions the loan, then you complete EDP training before the margin-money subsidy is released.

You can track the status of your application online with your application ID, and the Udyomi mobile app sends SMS updates as the application moves from the nodal agency to the bank for sanction and disbursement. If your application is rejected, you can appeal to the nodal agency within a fixed window.

PMEGP interest rate and repayment

PMEGP does not fix an interest rate — the lending bank sets it, and the scheme’s subsidy is what brings your effective cost down. As a reference, State Bank of India priced PMEGP loans at 12.15% p.a. (EBLR + 3.25%) effective from February 2025 ⚠️. Your own bank’s rate will depend on its MCLR/EBLR, your credit profile and the tenor.

Repayment runs over 3–7 years depending on the project. The subsidy (margin money) is not repaid — it is a grant — but it stays locked in your business for three years.

EDP training: compulsory after sanction

After the loan is sanctioned, every beneficiary must complete Entrepreneurship Development Programme (EDP) training before the subsidy is released. It is free and can be completed online on the Udyami portal.

• Projects above ₹5 lakh: 10 working days of EDP training.
• Projects up to ₹5 lakh: 5 working days of EDP training.
• Projects up to ₹2 lakh: exempt from the mandatory training requirement.
• Special categories, women and differently abled beneficiaries can use the free online EDP without attending classroom sessions.

Collateral, CGTMSE and the guarantee

PMEGP loans up to ₹10 lakh are collateral-free under RBI norms. For loans above that, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) covers the loan, so the bank does not ask for a third-party guarantee — the guarantee premium is paid on the loan, not by you.

CGTMSE guarantee cover now runs up to ₹10 crore per borrower (raised from ₹5 crore with effect from 1 April 2025). For PMEGP loans between ₹10 lakh and ₹50 lakh the Annual Guarantee Fee is 0.55% p.a., with a 10% concession for social categories. This is why PMEGP is one of the easiest government schemes for a new business to borrow under — the risk is shared, not stacked on you.

From a PMEGP unit to trade: what comes next

PMEGP funds your first unit — but the loan is a start, not a ceiling. Many entrepreneurs take their micro-enterprise into exports or start importing raw material and machinery as the business grows. That is where trade finance takes over from the subsidy world.

If your PMEGP unit starts selling overseas, export factoring lets you get paid on shipped invoices in days instead of waiting out a 60–90 day buyer credit period. If your buyer insists on a letter of credit, LC discounting advances the cash before the LC matures. And if your unit imports raw materials, multicurrency accounts and cross-border payments handle the supplier side.

Frequently asked questions