After conceiving several ideas for starting your business, doubts of lack of funding creep into your mind. Here comes PMEGP, the scheme to fulfill your dreams of entrepreneurship! This scheme setup by the Government offers funding in the form of a mix of grants, subsidies, and very low-interest bank loans that support the setting up of a new project in fields such as manufacturing, service, or trading.
In this exhaustive guide, we will take you through the PMEGP loan in detail concerning eligibility, advantages, documents required for applying, interest rates, and also the online application procedure step-by-step. So let’s get started!
What is the PMEGP Loan?
The Prime Minister’s Employment Generation Programme (PMEGP) is a flagship scheme of the Government which aims towards generation of self-employment among the unemployed youths, women, and backward class communities. You can avail the following features under the scheme:
- Subsidy rate of 35% of the project cost
- A maximum of 60%-75% of total costs will be financed by bank credit
- Low-interest rates with flexible repayment options
Key Highlights of PMEGP Loan
| Feature | Details |
|---|---|
| Scheme Name | Prime Minister’s Employment Generation Programme (PMEGP) |
| Maximum Loan Amount | ₹25 lakh (Manufacturing) / ₹10 lakh (Services) |
| Subsidy (General Category) | 15% (Urban) / 25% (Rural) |
| Subsidy (Special Category*) | 25% (Urban) / 35% (Rural) |
| Bank Loan Percentage | 60-75% of project cost |
| Own Contribution (Margin Money) | 5-10% |
| Repayment Period | 3 to 7 years |
| Application Mode | Online (www.kviconline.gov.in) |
Special Category includes SC/ST/OBC, women, ex-servicemen, and differently-abled individuals.
Benefits of PMEGP Loan
- Financial Support: Up to ₹25 lakh subsidy for new businesses.
- Low-Interest Loans: Banks offer loans at competitive rates (10-12%).
- Employment Generation: Helps create self-employment and local job opportunities.
- Skill Development: Free business training and technical guidance provided.
- Women & Minority Empowerment: Extra subsidy for women, SC/ST, and OBC applicants.
Eligibility Criteria for PMEGP Loan
To apply for a PMEGP loan, you must meet the following conditions:
- Age: 18-50 years
- Education: Minimum 8th pass (for projects above ₹10 lakh)
- Residency: Must be an Indian citizen
- Priority Groups: SC/ST/OBC, women, ex-servicemen, and differently-abled get preference
- No Existing Business: The scheme is only for new ventures
Documents Required for PMEGP Loan
Before applying, keep these essential documents ready:
- Aadhaar Card & PAN Card (Identity Proof)
- Voter ID / Passport / Driving License (Address Proof)
- Bank Account Details & Passbook Copy
- Project Report (Business Plan)
- Educational Certificates (If applicable)
- Passport-size Photograph
PMEGP Loan Interest Rates & Fees
- Interest Rate: 10-12% per annum (varies by bank)
- Processing Fee: 0.5-1% of the loan amount
- Government Subsidy: 15-35% (reduces your loan burden)
Pro Tip: Always compare interest rates from different banks before applying!
How to Apply for PMEGP Loan Online (Step-by-Step Guide)
Step 1: Visit the Official Website
Go to www.kviconline.gov.in
Step 2: Register & Login
- Click on “New User? Register Here”
- Fill in your mobile number, email, and personal details
Step 3: Fill the Application Form
- Enter personal, business, and financial details
- Upload required documents
Step 4: Submit & Track Application
- Verify all details and submit
- Keep checking application status online
Step 5: Loan Approval & Disbursement
- After verification, the bank will approve your loan
- Funds will be transferred to your account
Frequently Asked Questions (FAQs)
1. What is the maximum loan amount under PMEGP?
Manufacturing Sector: Up to ₹25 lakh
Service Sector: Up to ₹10 lakh
2. Who is eligible for a 35% subsidy?
SC/ST/OBC, women, ex-servicemen, and differently-abled applicants in rural areas
3. How long does it take to get a PMEGP loan?
Typically 30-60 days after document submission
4. Can I apply offline for PMEGP?
Yes, visit your nearest KVIC office or bank branch
5. Is collateral required for PMEGP loans?
No, since the government provides a subsidy, most banks do not ask for collateral