PM Employment Generation Programme (PMEGP) — How to Apply Online

The Prime Minister's Employment Generation Programme (PMEGP) is a central government credit-linked subsidy scheme for setting up new micro-enterprises in manufacturing and service sectors. Administered by the Khadi and Village Industries Commission (KVIC) under the Ministry of MSME, PMEGP provides a margin money subsidy of 15%–35% on bank loans, making it one of the most popular schemes for aspiring entrepreneurs in India.

What is PMEGP?

PMEGP helps individuals set up new self-employment ventures by providing a government subsidy (margin money) on bank loans. The beneficiary only needs to contribute 5%–10% of the project cost as their own contribution, while the remaining amount is financed by banks. The government's margin money subsidy is routed through KVIC directly to the bank.

Who is Eligible?

• Age: 18 years and above
• Education: Minimum Class 8th pass (for projects above ₹10 lakh in manufacturing and ₹5 lakh in service sector)
• No minimum education for projects below these limits
• Must not be a defaulter of any nationalised bank or financial institution
• Must not have availed subsidy under any other government scheme (PMRY, REGP, etc.)
• New projects only — existing units cannot apply (2nd loan available for PMEGP/MUDRA upgradation)
• Self Help Groups, trusts, cooperative societies and charitable institutions are also eligible

Subsidy (Margin Money) Structure

Maximum Project Cost

Documents Required

• Aadhaar card
• PAN card
• Educational certificates (Class 8th and above)
• Caste/category certificate (SC/ST/OBC, if applicable)
• Project report/proposal with cost estimates
• Passport-size photographs
• Address proof (Aadhaar/Voter ID/utility bill)
• Bank account details
• EDP (Entrepreneurship Development Programme) training certificate (obtained after sanction)
• Quotations for machinery and raw materials
• Land/premises documents (ownership or lease agreement)

Step-by-Step Application Process

Online Application

1. Visit the PMEGP e-Portal at kviconline.gov.in/pmegpeportal
2. Click on "Online Application Form for Individual"
3. Fill the form — personal details, project details, Aadhaar number, category
4. Prepare a detailed project report with cost breakup (machinery, raw materials, working capital)
5. Upload required documents and project report
6. Submit the application — you'll receive a reference ID
7. Application is forwarded to the District Task Force Committee (DTFC) for scrutiny
8. DTFC interviews shortlisted candidates
9. If recommended, the application is sent to the identified bank branch
10. Bank processes the loan application and sanctions the loan
11. Complete EDP training (typically 6–10 days)
12. Margin money is released by KVIC to the bank after loan disbursement
13. Set up your enterprise and begin operations

Through Jan Samarth Portal

You can also apply via the Jan Samarth portal which connects you to multiple lending banks digitally.

Processing Time

• Application submission: Instant (online)
• DTFC scrutiny and recommendation: 30–60 days
• Bank loan sanction: 30–45 days after recommendation
• Total timeline: 3–6 months from application to disbursement

Important Tips

1. Prepare a strong project report — this is the most critical document. Include realistic cost estimates, market analysis and projected returns
2. Choose a bankable activity — avoid negative list items (tobacco, alcohol, polythene, etc.)
3. Apply for rural location if possible — the subsidy is significantly higher (25%–35% vs 15%–25%)
4. Complete EDP training promptly after loan sanction — margin money release depends on it
5. The project cost includes land, building, machinery, raw materials and working capital — plan comprehensively

Frequently Asked Questions

Can I apply for PMEGP if I already have a business?

No. PMEGP is for new enterprises only. However, if you have an existing PMEGP, REGP or MUDRA unit, you can apply for a 2nd loan for upgradation.

Is PMEGP a loan or a grant?

PMEGP is a credit-linked subsidy scheme — you get a bank loan, and the government provides a margin money subsidy (15%–35%). The loan portion must be repaid to the bank; the subsidy portion is non-refundable.

What is the interest rate on PMEGP loans?

The interest rate is as per the lending bank's norms. Typically, it ranges from 8%–12% per annum depending on the bank and loan amount. The subsidy reduces your effective borrowing cost significantly.

Can I get PMEGP for a service like a salon or repair shop?

Yes. Service sector projects like beauty parlours, repair shops, tailoring units, xerox centres, and food processing units are all eligible under PMEGP.

What happens if my application is rejected by the bank?

If the bank rejects your application, you can appeal to the District Task Force Committee. You may also apply to a different bank branch. Ensure your project report is realistic and well-documented.

Is there any age limit for PMEGP?

The minimum age is 18 years. There is no upper age limit for PMEGP.

This guide is for informational purposes only and is not affiliated with any government body. Visit kviconline.gov.in for official details. Also explore our Stand Up India guide and Startup India guide for more business support options.