Want to start your own small business but don't have enough capital? The Prime Minister's Employment Generation Programme (PMEGP) helps you get a bank loan for a new manufacturing or service unit, with the government paying back 15% to 35% of the project cost as a subsidy so you never have to repay that portion. This guide explains eligibility, subsidy rates, documents, and the exact online application process for 2026.
What Is PMEGP?
PMEGP is a credit-linked subsidy scheme run by the Khadi and Village Industries Commission (KVIC) under the Ministry of Micro, Small and Medium Enterprises (MSME). It merges the older PMRY and REGP schemes into one. Instead of giving you cash directly, PMEGP arranges a term loan from a bank or financial institution for your project, and the government's share (called margin money) is credited into that loan account after your unit is verified — reducing the amount you must repay.
PMEGP is meant only for setting up a NEW unit. If you already run a business or have taken subsidy under PMRY, REGP, or any other government scheme, you are not eligible.
Who Can Apply — Eligibility Criteria
- ●Any individual aged 18 years or above
- ●For projects above ₹10 lakh (manufacturing) or ₹5 lakh (service), the applicant must have passed at least Class 8
- ●Self Help Groups (SHGs), registered institutions, cooperative societies, and charitable trusts are also eligible
- ●Existing units already availing subsidy under any state or central government scheme cannot apply again
- ●Only one member of a family (self, spouse, and unmarried children counted as one family) can get PMEGP assistance for one unit
Maximum Project Cost & Your Contribution
| Manufacturing sector — maximum project cost | ₹50 lakh |
| Service/trading sector — maximum project cost | ₹20 lakh |
| Applicant's own contribution — General category | 10% of project cost |
| Applicant's own contribution — Special category | 5% of project cost |
| Remaining amount | Bank term loan (subject to bank appraisal) |
Government Subsidy (Margin Money) Rates
'Special category' under PMEGP includes SC, ST, OBC, Minority, Women, Ex-servicemen, Transgender persons, and persons with disability (PwD). Applicants in rural areas get a higher subsidy than those in urban areas.
| General category — Urban area | 15% subsidy |
| General category — Rural area | 25% subsidy |
| Special category — Urban area | 25% subsidy |
| Special category — Rural area | 35% subsidy |
Documents Required
- ●Aadhaar Card and PAN Card
- ●Passport-size photograph
- ●Detailed Project Report (DPR) for the proposed business
- ●Educational qualification certificate (if project cost exceeds ₹10 lakh/₹5 lakh)
- ●Caste certificate (for SC/ST/OBC/Minority category, to claim higher subsidy)
- ●Disability certificate (for PwD category, if applicable)
- ●Rural Area Certificate (issued by Tehsildar or competent authority, if claiming rural subsidy in a doubtful area)
- ●Bank account details and a cancelled cheque
How to Apply for PMEGP Online — Step by Step
- 1Go to the official PMEGP e-Portal at https://pmegp.msme.gov.in
- 2On the homepage, click 'PMEGP e-Portal Registration' or the 'Apply' button under 'Individual/Others'
- 3Select your Sponsoring Agency — KVIC, KVIB (State Khadi Board), or DIC (District Industries Centre) — based on your district and sector
- 4Choose your Social Category (General/OBC/SC/ST/Minority) and Special Category (if any, such as Ex-Servicemen or PwD) from the dropdown
- 5Fill the online application form with personal details, proposed activity, project cost, and bank details, then click 'Save & Continue'
- 6Upload scanned copies of Aadhaar, PAN, educational certificate, and caste certificate (if applicable) in the 'Upload Documents' section
- 7Review the auto-generated Application ID and click 'Submit Application'
- 8Download and print the acknowledgement slip carrying your Application ID for future tracking
- 9Track status anytime using 'Track Application' on the same portal with your Application ID
Never pay any agent or middleman to 'guarantee' a PMEGP loan approval — the scheme is free to apply for, and final loan sanction depends entirely on the bank's appraisal of your project.
What Happens After You Apply
After submission, your application is forwarded by the Sponsoring Agency to a bank branch of your choice for appraisal. If the bank sanctions the loan, it disburses the funds and informs KVIC. Once you set up the unit and it is physically verified, and you complete Udyam Registration for the new enterprise, the government's margin money subsidy is credited directly into your loan account — reducing your effective loan liability.
Udyam Registration for your new unit is mandatory before physical verification and margin money adjustment. Register free at udyamregistration.gov.in once your loan is sanctioned.
Interest Rate and Repayment
PMEGP itself does not fix a uniform interest rate — the loan is disbursed by your chosen bank at its standard MSME lending rate (commonly in the 8–12% range per annum as of 2026, varying by bank and applicant profile), applied only on the bank-financed portion after the subsidy is adjusted. Repayment tenure is typically 3 to 7 years, decided by the bank based on your project's cash flow.
Helpline & Support
| Email support | support-pmegp@msme.gov.in |
| Technical issues (portal/login) | 022-69168907 |
| Operational/application queries | 022-26712087 |
| Portal | pmegp.msme.gov.in |
PMEGP remains one of the most accessible routes for first-time entrepreneurs to get affordable, subsidised funding without pledging heavy collateral. Prepare a clear project report, keep your documents ready, and apply directly on the official portal to avoid delays or fraud.