How PMEGP works
PMEGP is a credit-linked subsidy scheme of the Ministry of MSME. You take a loan from a bank for a new project, and the government adds a "margin money" subsidy that reduces what you have to repay. The Khadi and Village Industries Commission (KVIC) runs it nationally, with state Khadi boards (KVIBs) and District Industries Centres (DICs).
How much subsidy
| Who | Your contribution | Subsidy in urban areas | Subsidy in rural areas |
|---|---|---|---|
| General category | 10% of project cost | 15% | 25% |
| Special category | 5% of project cost | 25% | 35% |
Special category includes SC, ST, OBC, minorities, women, ex-servicemen, transgender persons, persons with disabilities, and applicants from the North-East, hill and border areas and aspirational districts. The bank lends the rest.
Project limits
- Manufacturing: project cost up to ₹50 lakh
- Service or business: project cost up to ₹20 lakh
Eligibility
- Aged 18 or above
- At least class VIII pass for manufacturing projects above ₹10 lakh and service projects above ₹5 lakh
- Only new projects; an existing unit, or one that already got a government subsidy, does not qualify
- Completing the Entrepreneurship Development Programme (EDP) training the scheme asks for
Status in 2026
The Ministry of MSME approved PMEGP for five years, from 2021-22 to 2025-26. At our last check we could not find a notice extending it beyond March 2026. Before you prepare a project, check the KVIC PMEGP portal for whether new applications are open and on what terms.
How to apply
- Prepare a project report: what you will make or offer, machinery, cost, expected sales.
- Apply online on the PMEGP e-portal of KVIC and choose the bank branch.
- The application is screened by the district task force and sent to the bank; the bank appraises and sanctions the loan.
- The subsidy is released to the bank and kept as a deposit in your name until the unit is checked.
If PMEGP is not open, or you need more
A business loan or an MSME loan from banks and NBFCs works for new and running businesses, without the subsidy.
Oxon Fintech is not a government agency and does not take applications for this scheme. Apply on the official portal or at a bank branch, and be careful of anyone who asks for money to get a scheme loan approved. Scheme rules change; check the official site before you apply.