PMEGP loan with capital subsidy
The Prime Minister’s Employment Generation Programme (PMEGP), run by KVIC, funds new micro units through banks. Part of the project cost is given as margin-money subsidy, held for three years and then adjusted against the loan.
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| Lender | Type | Rate range | Up to | Min score |
|---|---|---|---|---|
| State Bank of India PMEGP loan with capital subsidy | Public Sector Bank | 8.25% – 10.25% | ₹50 L | 650 |
| Bank of Baroda PMEGP loan with capital subsidy | Public Sector Bank | 8.25% – 10.25% | ₹50 L | 650 |
| Punjab National Bank PMEGP loan with capital subsidy | Public Sector Bank | 8.25% – 10.25% | ₹50 L | 650 |
| Canara Bank PMEGP loan with capital subsidy | Public Sector Bank | 8.25% – 10.25% | ₹50 L | 650 |
| Union Bank of India PMEGP loan with capital subsidy | Public Sector Bank | 8.25% – 10.25% | ₹50 L | 650 |
As on 26 Oct 2026, RBI repo rate 5.50%. Indicative ranges; your rate depends on your profile.
Who is eligible
- Individuals above 18 years, SHGs, trusts and co-operatives setting up a new unit
- Project cost up to ₹50 lakh for manufacturing, ₹20 lakh for services
- Pure trading and activities on the negative list are not covered
- Only one member of a family can avail the scheme
How much you can get
- Subsidy: 15% (urban) or 25% (rural) for general category; 25% and 35% for special categories
- Own contribution: 10% general, 5% special category
- Bank loan: the balance of the project cost; collateral-free
Documents
- Project report
- Aadhaar, PAN, caste or category certificate where applicable
- Education certificate (VIII pass for projects above ₹10 lakh manufacturing / ₹5 lakh services)
- Rent agreement or land papers for the premises
Tips from our credit panel
- Apply on the KVIC PMEGP portal, not at the bank
- Complete the short EDP training – the subsidy is released only after it
- Keep the unit running three years to get the subsidy adjusted
Common questions
How much subsidy does PMEGP give?
Between 15% and 35% of project cost depending on category and location (urban or rural).
Is collateral needed for a PMEGP loan?
No. PMEGP loans up to ₹20 lakh are collateral-free under RBI directions, and the scheme is covered by credit guarantee.