The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy programme launched in 2008-09. It was mainly started so New and MSME businesses could easily get an unsecured loan to expand and grow their business.
The PMEGP Scheme has been revised with important changes from 1st June 2022. This article is a complete guide on how to can apply for a PMEGP loan upto Rs 50 lacs on the PMEGP portal under this new scheme.
We will cover:
Explainer Video
1. What is the PMEGP New 2022 scheme and eligibility criteria
Under the PMEGP Scheme 2022, the most significant change is the increase in loan limit and subsidy. Now, manufacturing units can set up new projects up to Rs. 50 lacs, while the Business/Service sector limit is up to Rs. 20 lacs.
You are also eligible to get a subsidy on this project cost at the following rates.
| Category | Urban Area | Rural Area |
| General Category | 15% | 25% |
| Special Category – SC, OBC, Women, Hill & Border Areas, etc. | 25% | 35% |
Other Eligibility criteria:
| Condition | PMEGP Eligibility Criteria |
| Who can apply | Any person who is 18 years and above |
| Income Upper limit | There is no such limit. Anyone with any income level can apply for PMEGP Loan. |
| Education requirement | If you need a loan of more than Rs. 10 lakh for a Manufacturing unit or more than Rs. 5 lakh in a Service business, then you need to be a minimum Class 8 pass. |
| Type of Projects Eligible | Only New projects which have not taken any other Government Subsidy can apply. Also, the nature of the business should be eligible under the PMEGP Scheme. |
| Type Of Loan | There has to be a Term Loan for Capital Expenditure. You cannot apply for only a working capital loan under the PMEGP scheme. (We will see later in this post how to calculate term loan and working capital loan amount breakup for PMEGP loan) |
| Family restriction | Only one person, either husband or wife, can take benefit from the PMEGP scheme |
| Loan Duration | 3 to 7 years |
| Application mode | Application for a loan is to be made Online on PMEGP Portal only. |
2. How to apply for a loan online on the PMEGP portal
PMEGP loan can only be applied on its online KVIC portal. To begin, visit the KVIC website – https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp
And click on the ‘Application for New Unit’ option as shown in the below image
Now the PMEGP application form will open. Let’s see how to fill each and every requirement of this form
PMEGP Application form – part 1
| Sr no. | Requirement | How to Fill |
| 1 | Aadhar Card No. | Enter your 12-digit Aadhar number here. If you do not have Aadhar, then furnish the Aadhar enrolment number. If you are in NER, J&K region, you can enter PAN if you don’t have Aadhar Card |
| 2 | Name of Applicant | Choose the title from Shri, Smt, from the drop-down menu as applicable. Then type your name.
If you have put your Aadhar number, then click validate Aadhar button |
| 3 | Sponsoring Agency | Choose the agency to whom you would like to send your loan application for verification.
If your business will be in an urban area, then choose DIC only. If you plan to set up a business in a rural area, you can select any of the agencies from KVIC, KVIB, or DIC. |
| 4 | State | Select the State of your Business Location |
| 5 | District | Select the District of your Business Location |
| 6 | Sponsoring Office | Based on the State and District selected, you will get options of agency offices in which your application will go.
Choose the appropriate agency office for you |
| 7 | Legal Type | This Field is pre-filled as ‘Individual.’ You don’t have to do anything. |
| 8 | Gender | Select the applicant’s gender from the drop-down menu |
| 9 | Date of Birth | Enter the applicant’s date of birth in DD-MM-YYYY format as shown in the below image |
| 10 | Social Category & Special Category | Select the appropriate category from General, SC, ST, etc.
Select the Special Category option as applicable. If you are not in Special Category, then choose ‘Not Applicable.’ |
PMEGP Application form – part 2
| Sr no. | Requirement | How to Fill |
| 11 | Qualification | Select the applicable educational qualification from the drop-down menu.
Remember, if you choose – under 8th option, then you cannot apply for a loan amount higher than Rs. 10 lakh for a Manufacturing unit or more than Rs. 5 lakh in the Service business |
| 12 | Communication Address, Mobile, Email, PAN | Type your Address and Mobile number here. You Can also enter your email id optionally here.
Also, enter your PAN number here. If you have not put your Aadhar number, then it is mandatory to enter your PAN |
| 13 | Unit Location | Select whether your Business is going to be set up in an Urban or Rural area |
| 14 | Proposed Unit Address | Enter the address of the place where you propose to carry out your Business. If you have not finalized the location, then you can copy your communication address |
| 15 & 16 | Type of Activity | Select the nature of your Business Activity from options Manufacturing, Service, or Trading.
Then Click on select Industry / Activity. Choose your industry, and then under the Product description, mention your product in more detail. In the below example – the Nature of Business is Manufacturing, Industry/Activity chosen is – Cottage soap industry. While Description given is – Making Beauty Soap Bars, Liquid Soaps, Handwash |
PMEGP Application form – part 3
| Sr no. | Requirement | How to Fill |
| 17 & 18 | EDP Training | If you have already undergone EDP training, then choose ‘Yes’ and enter the name of the EDP training institute. Otherwise, select ‘No’ and leave the training institute field blank |
| 19 | Project Cost | Here you need to enter the amount of term loan and working capital loan required.
We advise you to prepare your project report as explained in point 3 below and then enter values here. However, as per PMEGP guidelines, the working capital loan amount cannot be more than 40% for Manufacturing units and not more than 60% for Service units. So keep this limit in mind |
| 20 | First Financing Bank | Choose the Bank from which you want the loan to be sanctioned. It is advisable to choose the Bank which has a branch near your business unit area |
| 21 | Alternate Financing Bank | You can also choose another Bank as 2nd choice. This field is an optional requirement |
| 22 | Avail CGTSME | If you are taking a loan above Rs. 5 lacs and you do not have any property/asset to give as a mortgage, then you can choose ‘Yes’ and take CGTSME cover |
| 23 | Where did you hear about PMEGP | You can select any available option here. |
Your PMEGP Application form is now complete for submission. Tick the declaration and click the ‘Save Application’ button.
You will now get the username and password for your application on your mobile number.
3. How to make a Project Report for a PMEGP loan of Rs. 50 lacs
In the PMEGP application, your Project Report is a crucial document. We will use the Fortrisk Consulting Project Report Software to make a Perfect PMEGP Project Report.
Click here to open the Fortrisk Consulting Project Report software, enter your Business details like name, nature of Business, subsidy rate, loan duration, etc., as shown below, and click next.
On the 2nd Page, enter the owner’s details and the number of employees you plan to hire.
On the 3rd Page, give the breakup of the assets you will buy from the term loan, like machinery, computer, etc., and the working capital loan amount. It is advised to keep the amount of the working capital loan not be more than twice your expected monthly business expenses.
On the 4th Page, enter the expected monthly expenses of the new business project, like, stock purchase, salary, electricity, etc., as shown in the below image. This amount is just an estimate that you feel you will incur once you start the business.
That’s it, now click the download button and download your Project Report. You can check your report and edit it if you want to.
4. Documents to be uploaded for PMEGP loan
KYC and Project Report
Once you submit the application form online, you will be asked to upload documents and prepare a scorecard.
To upload documents click on the upload button, and you will see a screen like the one below. Upload documents such as your passport photo, PAN, Aadhar, Education degree proof, rural area proof, SC/ST proof, etc. You will see one option of Project Profile/summary for that, attach the Project Report as made in point 3 above.
Once these documents are uploaded, click the scorecard button and you will see a screen like the one below:
PMEGP Scorecard documents
Choose the options as applicable in your case, and make sure the details you enter are correct because after submission of the scorecard you will be asked to upload documents as proof.
In the scorecard, field no. 19 asks about Average DSCR, this value you will find in the Fortrisk Consulting project report on page no. 2
After submitting your scorecard you will get to know your score, if your score is high enough it will come in green color as shown below. If the score is low it will come in red. To qualify for a PMEGP loan, your score should be as below:
| Project Cost | Minimum Score |
| Upto 10 lacs | 50 out of 100 |
| Above 10 lacs | 60 out of 100 |
.
EDP training
After uploading documents and completing the scorecard, click on the EDP button. You will have to undergo EDP training to get a PMEGP subsidy. However, you can choose whether to take training before sanctioning of loan or after the sanction. Choose the option that you would like to take and click submit
.
Final Submission
It is advised that you carefully recheck your submission, and if everything is proper, click on the Final Submission button on the menu and click ‘Final Submission of Application to Sponsoring Agency’ to submit your PMEGP loan application
After the sponsoring agency approves, your application will get forwarded to your preferred Bank. The Bank officials may call you for questioning and call for additional details if needed. Once the Bank is satisfied with your application, they will sanction your PMEGP loan. You will get the eligible subsidy after 3 years of loan sanction.
5. Important PMEGP guidelines that you need to follow
We have already explained in detail the PMEGP eligibility criteria, documents, and the right way to fill out the application on the PMEGP portal.
However, you must carefully follow the PMEGP guideline to make your loan application eligible. Some important guidelines to be careful about are:
-
Do not include the Cost of Land
PMEGP loan cannot be given for buying land, so ensure the land cost is not included in your project report. However, the construction cost of a building/shed is allowed under PMEGP.
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All Trading activities are not allowed.
Only specific areas, such as A&N islands, and NER, are allowed for PMEGP loans for trading business. In other regions, only trading in KVIC products or trading your own manufactured products are permitted under PMEGP.
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Business Activity should not be on the Negative list
Ensure that your proposed business activity is not on the negative list given in the PMEGP guidelines. Click here to see the PMEGP guidelines and business activities falling under the negative list.
That’s it; follow this step-by-step guide and easily apply for a PMEGP loan. If you have any questions, let us know in the comment section, and we will get back to you as soon as possible.
Important Links:
PMEGP Online Official Website |
Click Here |
PMEGP Guidelines |
Click Here |
Software to make Project Report for PMEGP loan |
Click Here |
Demo video on How to make Project Report for PMEGP Loan |
Click Here |
4 comments
Supratik T Deb
January 15, 2023 at 8:19 am
Hi,
I need few clarity.
I have filled the form as per your suggestions.
How much time is required to get a reply from government?
mithishah
January 21, 2023 at 6:19 am
Sir usually the whole PMEGP loan approval process takes 2 months time
Tanmay
June 12, 2023 at 4:26 pm
Hi , can anyone personally help me by step by step
From filling the form to get it disbursed
mithishah
August 23, 2023 at 3:58 am
Sir we can help you in getting Loan for existing business. You should be in Business for atleast 2 years