What Is the PMEGP Scheme and How Can It Help Your Business Grow?

What Is the PMEGP Scheme?

The Prime Minister's Employment Generation Programme (PMEGP) is a government-backed, credit-linked subsidy scheme that helps individuals start or expand micro-enterprises. Launched in August 2008, it's run by the Ministry of MSME and implemented by the Khadi and Village Industries Commission (KVIC) and State-level bodies.

This scheme merges two earlier ones PMRY and REGP and focuses on creating jobs by supporting micro-businesses in both urban and rural areas.

Who Can Apply for the PMEGP Scheme?

If you're a first-time entrepreneur, artisan, unemployed youth, or someone from a special category (SC/ST/OBC/Women, etc.), PMEGP is built for you. It supports manufacturing and service businesses, especially those located in rural or semi-urban India.

Whether you're planning to start a unit or upgrade an existing PMEGP/REGP/MUDRA business, this government scheme gives you financial muscle.

Benefits of PMEGP for Startups & MSMEs

• Loan + Subsidy Combo: Get up to ₹50 lakh (manufacturing) or ₹20 lakh (service) with 15–35% government subsidy.
• Only 5–10% Contribution Needed: Special categories need just 5% margin money, making it accessible even if funds are tight.
• Second Loan Option: Already running a PMEGP unit? You can apply again for business upgradation and get additional support.
• No Collateral Needed: For loans up to ₹10 lakh, no collateral security is required.
• Pan-India Reach: Available in all states and union territories, with a special boost for NER, hill states, and aspirational districts.

Scheme Budget and Reach

• Total Outlay (2021–26): ₹13,554.42 crore
• Target: 4 lakh new units, creating 30 lakh+ jobs
• Annual Upgrade Plan: 1,000 units per year

This makes it one of India’s most impactful MSME support programmes, helping entrepreneurs across sectors build local jobs and sustainable income.

PMEGP Scheme Eligibility

The PMEGP Not allowed: Alcohol, tobacco, meat-processing units, and projects banned by local laws.

State Availability

PMEGP is available across all Indian states, implemented via:

• KVIC & KVIB
• District Industries Centres (DICs)
• Coir Board (for coir-related businesses)

This multi-agency model ensures access and handholding even in small towns and rural belts.

Application Process: Online & Easy

1. 👉 Go to KVIC PMEGP Portal
2. ✍️ Apply as:
   • New Unit or
   • Existing Unit (2nd Loan)
3. 📄 Upload required documents:
   • Caste certificate, project report, education/training certificate, rural proof
4. 💼 Submit & wait for bank/agency follow-up

StartupFlora: Your Growth Partner for PMEGP Success

Applying for PMEGP isn’t just about filling a form — it’s about building a solid business plan that banks trust. That’s where StartupFlora comes in:

We help you:

• Create winning project reports
• Get bank-ready documentation
• Check eligibility & margin money fit
• Plan for 2nd loan growth and upgrades

Let’s turn this government opportunity into your startup launchpad.

Similar Schemes You Should Know

• MUDRA Loan – For micro and nano enterprises
• Credit Guarantee Fund Scheme (CGTMSE) – For collateral-free MSME loans
• Stand-Up India Scheme – For SC/ST and Women entrepreneurs
• PM Vishwakarma Scheme - Best for Artisans & Hand Crafts Business

FAQs on PMEGP

What’s the max loan I can get under PMEGP?

• ₹50 lakh for manufacturing
• ₹20 lakh for service/trade sector

Do I need to provide collateral?

• No, for loans up to ₹10 lakh under CGTMSE coverage.

Is EDP training mandatory?

• Yes, it's a core part of the approval process.

Can I apply if I already run a business?

• Only if you haven’t availed any government subsidy before. For upgrades, your first loan must be repaid.

How long does approval take?

• Varies, but typically within 2–3 months post submission and document verification.