PMEGP Online Apply: Step-by-Step Guide

The Prime Minister's Employment Generation Programme (PMEGP) helps you set up a new micro-enterprise in the non-farm sector. You take a bank loan, and the government pays part of your project cost as a "margin money" subsidy. You apply online on the PMEGP portal. This guide covers who can apply, how much subsidy you can get, the online form, the documents, EDP training and how the subsidy reaches your loan account.

This guide is based on the official guidelines as of October 2026; always check the portal for the latest rules.

You can see the scheme summary on our PMEGP listing.

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Check the scheme cycle and the portal first

The government approved PMEGP for the 15th Finance Commission cycle, 2021-22 to 2025-26, according to the PIB release of 30 May 2022. A PIB release of 7 May 2026 reviews that cycle and says the Ministry of MSME plans to strengthen the scheme "in the forthcoming cycle". As of October 2026 we couldn't find an official notice of new limits or rates for the next cycle, so the figures below are the ones on the official portal today.

Applications have moved to a new portal. The Ministry of MSME announced the PMEGP 2.0 Portal for launch on MSME Day, 27 June 2026, with integration with the JanSamarth portal for loan processing (PIB, 25 June 2026). Apply at pmegp.msme.gov.in. Older guides that point to the KVIC e-portal may be out of date.

How PMEGP works

PMEGP is run by the Ministry of MSME, with the Khadi and Village Industries Commission (KVIC) as the national nodal agency. You choose one implementing agency when you apply: KVIC, the State Khadi and Village Industries Board (KVIB), the District Industries Centre (DIC), or the Coir Board for coir activities (PMEGP portal FAQ).

The money is split three ways:

Your own contribution: 10% of the project cost for general category, 5% for special category.
Margin money subsidy: 15% to 35% of the project cost, depending on your category and location.
Bank loan: the rest. Banks sanction 90% to 95% of the project cost, according to the Ministry of MSME scheme booklet 2025-26.

Interest is charged at normal bank rates. Repayment is 3 to 7 years after an initial moratorium, according to the PMEGP page on JanSamarth.

Project cost limits

The maximum project cost is:

Rs 50 lakh for manufacturing units
Rs 20 lakh for service and business units

These limits come from the PIB release of 30 May 2022 and are repeated on the PMEGP portal.

Project cost covers capital expenditure and working capital. The cost of land is not included. The cost of a ready-built shed, or a long-lease or rented workshed, can be included for a maximum of 3 years. Projects with no capital expenditure aren't eligible (PMEGP portal).

Subsidy rates

Category	Your contribution	Subsidy (urban)	Subsidy (rural)
General	10%	15%	25%
Special	5%	25%	35%

Source: PIB release of 30 May 2022 and the PMEGP portal FAQ.

Special category includes SC, ST, OBC, minorities, women, ex-servicemen, transgender persons, differently abled persons, the North Eastern Region (NER), aspirational districts, and hill and border areas as notified by the government (PMEGP portal FAQ).

Rural or urban depends on the local body. Areas under Panchayati Raj institutions count as rural, and areas under a municipality count as urban (PIB, 30 May 2022).

Who can apply

According to the PMEGP portal:

Any individual above 18 years of age.
No income ceiling applies.
You need at least an VIII standard pass if your project costs more than Rs 10 lakh in manufacturing or more than Rs 5 lakh in business or service.
Only new projects qualify. The unit should be set up only after you get the PMEGP loan. It can't be an expansion or modernisation of an existing business.
Existing units, and units that already got a government subsidy under another central or state scheme, aren't eligible.
Only one person per family can get assistance. The portal's eligibility section defines family as you, your spouse and your unmarried children. (The portal FAQ says "self and spouse", so check with your agency if this affects you.)

Trading is generally restricted. Retail outlets backed by manufacturing (including processing) or service facilities are allowed across the country. Shops selling Khadi, village industry, PMEGP or SFURTI products are allowed. Other sales outlets are allowed only in the NER, Left Wing Extremism-affected districts and the Andaman and Nicobar Islands. Activities on the scheme's negative list, or banned by local authorities, aren't allowed.

Documents checklist

Keep scanned copies ready. According to the PMEGP portal FAQ:

Photo
Aadhaar and PAN
Mobile number and bank details
Educational qualification details
Caste certificate, if applicable
Special category certificate, if applicable
Rural area certificate (a population certificate from the Gram Panchayat or municipal office, per the JanSamarth PMEGP FAQ)
Detailed project report (DPR)
Education, EDP or skill development training certificate, if you have one

Each file you upload must be under 1 MB (PMEGP user manual for new applicants).

Project report tip: download a sample project report for your activity from the portal and adapt it. The JanSamarth PMEGP FAQ notes that the report counts employment at roughly "1 lakh = 1 employee".

How to apply online: step by step

These steps come from the PMEGP portal's user manual for new applicants.

Open pmegp.msme.gov.in, click Login in the menu bar, then New Application.
Fill in the form. It asks for your Aadhaar and PAN, implementing agency, state and district, social and special category, qualification, unit address, project information, EDP training status, capital expenditure, working capital, number of employees, primary and alternate financing bank, and whether you want CGTMSE cover.
Tick the declaration and click Submit. The portal shows a User ID and Password, which are also sent by SMS to your mobile.
Log in as a registered applicant. Use Edit Application to correct details.
Complete the Score Card tab.
Upload documents in the Upload Documents tab.
Final Submission. Check everything and click Final Submit. Your application goes to the implementing agency you chose.

You can't apply online? The portal also has an offline application form in English, Hindi and many regional languages. Submit it at the nearest office of your implementing agency.

What happens after you submit

According to the PMEGP portal FAQ:

Agency review. Your application goes to the implementing agency you picked.
Score card check. If your application meets the satisfactory score, it's forwarded to your chosen bank.
Bank decision. The bank appraises your project's viability and makes its own credit decision.
Subsidy claim. Once the bank approves, the margin money claim goes to KVIC, which validates it and releases the subsidy through a nodal bank to your financing bank.

You'll get SMS updates on your registered mobile, and you can check the Current Status menu after logging in. If your application is rejected, fix the issues mentioned and reapply. For a delayed sanction, file a complaint in the portal's grievance section. For help at any stage, visit the nearest state office of KVIC, your KVIB or your DIC.

EDP training

EDP (Entrepreneurship Development Programme) training is mandatory for projects costing above Rs 2 lakh, and must be finished before the bank releases your loan. According to the PMEGP portal FAQ, it lasts:

At least 10 days for projects above Rs 5 lakh
At least 5 days for projects up to Rs 5 lakh

You don't have to wait for loan sanction. You can take EDP any time after you submit your application, on payment of EDP charges. The portal lists training centres, including RSETI and RUDSETI centres, and has online and offline EDP options.

Bank sanction and subsidy release

Pay your share. Deposit your own contribution and give the bank your EDP certificate, photo and Aadhaar number within 30 working days of hearing about your sanction (PMEGP portal FAQ).
Loan release and subsidy claim. The bank releases the loan and claims the margin money subsidy.
3-year lock-in. The subsidy is held in a deposit (TDR/SRF) for three years, counted from the release of your first loan instalment. The bank charges no interest on the matching part of your loan.
Physical verification and adjustment. After the lock-in, the subsidy is adjusted against your loan if the physical verification report is positive.

Keep in mind:

Collateral: the RBI asks banks to give collateral-free loans up to Rs 20 lakh to all PMEGP-financed units, for loans sanctioned or renewed from 1 April 2026 (RBI, 9 February 2026).
Udyam registration: your unit must be registered on the Udyam portal before physical verification and subsidy adjustment.
Working capital: your cash credit limit should touch 100% at least once during the lock-in, with average use of at least 75% (JanSamarth PMEGP FAQ).
One bank only: a project financed jointly by two banks or institutions isn't eligible.

Growing later: the second loan

Well-performing PMEGP, REGP and MUDRA units can get a second loan for upgrading. The 2025-26 MSME booklet gives these limits:

Maximum project cost: Rs 1 crore for manufacturing, Rs 25 lakh for service and trading
Subsidy: 15% of project cost (20% for NER and hill states), capped at Rs 15 lakh (Rs 20 lakh in NER and hill states)

To qualify, your margin money must have been adjusted, your first loan repaid on time, your unit must have made a profit for the last three years, and you need Udyam registration. The second loan should also create additional jobs.

FAQ

Can I apply for PMEGP without going through an agent?

Yes. You apply yourself on the PMEGP portal, or with the offline form at your implementing agency's office. For help with a project report, see our services.

Is PMEGP a loan or a grant?

Both. The bank gives you a loan, and the government pays the margin money subsidy against it. The subsidy sits in a deposit for three years and is then adjusted against your loan.

Can I use PMEGP for an existing business?

Not for the first loan. Only new units qualify. Existing PMEGP, REGP or MUDRA units can apply for the second loan for upgrading if they meet its conditions.

Can my spouse and I both apply?

No. Only one person per family can get assistance.

Do I need to pay for EDP training?

Yes. The portal FAQ says you take EDP on payment of EDP charges. The fee isn't stated on the portal, so check with your training centre or agency.

What if PMEGP doesn't fit my project?

Look at other credit-linked schemes such as MUDRA, or state capital subsidies. Browse subsidies and business loans on Startup Grants India.

Sources

Cover photo: Zoshua Colah on Unsplash

How to Apply for PMEGP Online: Step-by-Step Guide