Background of PMEGP – MSME Loan / SME Loan


  • The legislature of India has avowed the introduction of another credit associated gift program called Prime Minister’s Employment Generation Program(PMEGP) by combining the two plans that were in movement till 31.03.2008, specifically PM’s Rojgar Yojana (PMRY) and Rural Employment Generation Program (REGP) for the age of business openings through the foundation of miniature ventures in-country just as metropolitan territories. 
  • PMEGP is a focal area plot directed by the Service of Miniature, Little and Medium Undertakings. 
  • At the public level, the Plan is being executed by Khadi and Village Industries Commission (KVIC), a legal association under the managerial control of the Service of MSME as the single nodal organization. 
  • At the State level, the Plan will be carried out through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and Region Businesses Focuses and banks. 
  • The Government appropriation under the Plan will be directed by KVIC through the distinguished Banks for possible circulation to the recipients/business people in their Financial balances. 
  • The Carrying out Offices, in particular KVIC, KVIBs and DICs will relate presumed Non-Government Association (NGOs)/rumored self-sufficient foundations/Self-improvement Gatherings /Public Little Enterprises Organization /Udyami Mitras impaneled under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), Panchayati Raj establishments and other important bodies in the execution of the Plan, particularly in the space of distinguishing proof of recipients, of region explicit suitable ventures, and giving preparing in business advancement.

Objectives of PMEGP – MSME Loan / SME Loan

  • To produce ceaseless and economical work open doors in Provincial and Metropolitan spaces of the country 
  • To give consistent and feasible work to an enormous portion of conventional and forthcoming craftsmen, rustic and metropolitan jobless youth in the country through setting up of miniature ventures. 
  • To work with an investment of monetary foundations for higher credit stream to miniature area.


Eligibility Conditions for PMEGP – MSME Loan / SME Loan

  1. Any person, over 18 years old 
  2. There will be no pay roof for help for setting up projects under PMEGP.
  3. For setting up of task costing above Rs.10 lakh in the assembling area or more Rs. 5 lakh in the business/administration area, the recipients ought to have in any event VIII standard pass instructive capability. 
  4. Help under the Plan is accessible just for new ventures authorized explicitly under the PMEGP.
  5. Self-improvement Gatherings (counting those having a place with BPL given that they have not profited benefits under some other Plan) are additionally qualified for help under PMEGP. 
  6. Establishments enrolled under Social orders Enlistment Act,1860; 
  7. Creation Co-employable Social orders, and 
  8. Beneficent Trusts. 
  9. Existing Units (under PMRY, REGP or some other plan of Administration of India or State Government) and the units that have effectively benefited Government Sponsorship under some other plan of Legislature of India or State Government are not qualified.

Other eligibility conditions

  1. A confirmed duplicate of the standing/local area testament or important record gave by the able expert on account of other extraordinary classes, is needed to be created by the recipient to the concerned part of the Banks alongside the Edge Cash (sponsorship) Guarantee. 
  2. A confirmed duplicate of the byelaws of the organizations is needed to be attached to the Edge Cash (sponsorship) Case, any place important. 
  3. Venture cost will incorporate Capital Use and one pattern of Working Capital. Tasks without Capital Use are not qualified for financing under the Plan. Activities costing more than Rs.5 lakh, which don’t need working capital, need freedom from the Territorial Office or Regulator of the Bank’s Branch and the cases are needed to be submitted with such confirmed duplicate of endorsement from Local Office or Regulator, by and large. 
  4. Cost of the land ought not be remembered for the Task cost. Cost of the prepared worked just as long rent or rental Work shed/Workshop can be remembered for the venture cost subject to limiting such expense of prepared worked just as long rent or rental work shed/workshop to be remembered for the undertaking cost determined for a greatest time of 3 years as it were. 
  5. PMEGP is material to all new feasible miniature undertakings, including Town Businesses projects aside from exercises demonstrated in the negative rundown of Town Enterprises. Existing/old units are not qualified 

Salient features of the scheme

  • The Plan is executed through KVIC and State/UT Khadi and V.I. Sheets in Rustic territories and through Locale Enterprises Focuses in Metropolitan and Country zones in proportion of 30:30:40 between KVIC/KVIB/DIC individually. 
  • No pay roof for setting up of ventures.
  • Assistance under the Plan is accessible just to new units to be set up. 
  • Existing units or units previously benefited any Govt. Sponsorship either under State/Focal Govt. Plans are not qualified. 
  • Any industry including Coir Based undertakings barring those referenced in the negative rundown. 
  • Per capita speculation ought not surpass Rs. 1.00 lakhs in plain regions and Rs. 1.50 lakhs in Sloping territories. 
  • Maximum project cost of Rs. 25.00 lakhs in assembling area and Rs. 10.00 lakhs in Help Area.

Area of Operation

  • Rural Territory as pronounced under KVIC Act 2006 – Plan to be carried out by KVIC, KVIB and DIC (“Rural Area” signifies the region involved in any Town and incorporates the region included around there, the number of inhabitants wherein doesn’t surpass 20,000 or such other figure as the Focal Government may determine every once in a while as proclaimed under KVIC Act 2006) 
  • Urban territory – Just Region Enterprises Focuses (DIC)


Negative list of activities

  • Industry/Business associated with creations/preparing/offer of meat or intoxicant things like Beedi/Dish/Stogie/Cigarette and so on 
  • Industry/Business associated with development, sericulture, agriculture, horticulture. 
  • Manufacture of Polythene convey packs of under 20 microns/holders of reused plastic. 
  • Processing of Pashmina Fleece and items including hand turning and hand weaving going under domain of Khadi Accreditation Rule. 
  • Rural Transport (aside from Auto cart, Houseboat, traveler boat in An and N Islands and with the exception of house boat, Shikara and Vacationer Boats in Jammu and Kashmir and Cycle Cart.) 
  • CNG Auto Cart will be permitted distinctly in An and N Islands and NER with the endorsement of Boss Secretary of the State on merit.


Quantum of margin money subsidy

Classes of recipients under PMEGPRecipient’s own commitment (of undertaking cost)Pace of SubsidyRate of Subsidy
General Category10%15%25%
Extraordinary (counting SC/ST/OBC/Minorities/Ladies, Ex-Servicemen, Truly disabled, NER, Slope and Line zones and so on)05%25%35%

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