PMEGP · Ministry of MSME · KVIC
Prime Minister’s Employment Generation Programme
A credit-linked subsidy programme for new micro enterprises. Margin money subsidy of 15% to 35% of project cost, released through the financing bank and locked in for three years.
- Project cost
- Up to ₹50 L
- Subsidy
- 15%–35%
- Own contribution
- 5%–10%
Key features
What the scheme actually provides
- Maximum project cost of ₹50 lakh for manufacturing units and ₹20 lakh for service units
- Margin money subsidy of 15%–25% in urban and rural general category, and 25%–35% for special categories
- Beneficiary contribution of 10% for general category and 5% for special categories
- Only new units are eligible — existing or already-assisted units are not
- EDP training is mandatory before disbursement
- Subsidy is held as a term deposit and adjusted after a three-year lock-in
Who is eligible
- Individual above 18 years of age; institutions, SHGs, trusts and co-operative societies also eligible
- Minimum VIII standard pass for projects above ₹10 lakh in manufacturing or ₹5 lakh in service
- Only new projects — the unit must not have commenced operations
- No prior subsidy availed under PMEGP or any other government subsidy scheme for the same activity
Commonly not eligible
- Existing units seeking expansion, except under the separate second-loan provision
- Activities on the negative list, including certain polluting and prohibited trades
- Units already assisted under PMRY, REGP or any other central subsidy scheme
Where we come in
How FIN.SWITCH handles a PMEGP file
- 01
Confirm category, area classification and subsidy rate before the application is drafted
- 02
Prepare a project report sized to fit within the applicable ceiling without inflating cost
- 03
File the online application and track it through the district task force committee
- 04
Coordinate the bank appraisal and the subsequent margin money claim
Questions
PMEGP, answered plainly
After sanction and disbursement, and after completing EDP training. The margin money is kept as a term deposit with the financing bank and adjusted against the loan after the lock-in period, subject to satisfactory conduct.
Not under the first-loan route. There is a separate provision for a second loan to well-performing existing PMEGP units, with its own conditions.
Compare
Other schemes worth looking at
CGTMSE
Guarantee cover that lets a bank lend to a micro or small enterprise without collateral or third-party guarantee. The ceiling was raised from ₹5 crore to ₹10 crore following the FY 2025-26 budget announcement.
- Guarantee ceiling
- ₹10 Cr
- Cover
- 75%–85%
- Collateral
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PM MUDRA Yojana
Collateral-free credit for micro units in manufacturing, trading, services and allied agriculture, in four graded categories from ₹50,000 up to ₹20 lakh.
- Ticket size
- Up to ₹20 L
- Categories
- Four
- Collateral
- Not required
CGSS for startups
Guarantee cover for loans to DPIIT-recognised startups, operated by NCGTC. Enables venture debt and working capital without collateral, up to ₹20 crore per borrower.
- Ceiling
- ₹20 Cr per borrower
- Cover
- 85% / 75%
- Fee
- 1%–2% p.a.
Not sure whether PMEGP fits your business?
The eligibility check takes two minutes and gives you an indicative shortlist across every scheme we file under.