Government Nodal AgencyTerm Loan (Capex / Expansion)Micro Enterprise (Investment ≤ ₹1 Cr)🛡️CGTMSE CoveredVerified: 2026-09-29

PMEGP Manufacturing Enterprise Setup Loan (Up to ₹50 Lakh)

Primary Lending Institution:Ministry of Micro, Small and Medium Enterprises

Greenfield manufacturing setup credit up to ₹50 Lakh with 15% to 35% government capital subsidy.

Connected Central Government Scheme: PMEGP through KVIC - Manufacturing Enterprise Setup (Subsidy up to 35% on ₹50 Lakh)View Government Scheme Guidelines →

Interest Rate8.50% – 10.50% (Standard bank MSME rate on loan component)Linked to EBLR / MCLR / Risk

Loan Amount QuantumUp to ₹50 Lakh (Subsidy 15%–35%)Based on turnover & project cost

Repayment TenureUp to 7 years (with 3-year subsidy lock-in)With moratorium where applicable

Collateral SecurityNo collateral required for projects up to ₹10 Lakh; CGTMSE coverage for loans above ₹10 Lakh

What's Missing: Crucial Fine-Print & Exclusion Gaps

Strictly restricted to brand-new (greenfield) manufacturing projects. Existing units cannot apply for 1st loan. 8th pass minimum qualification mandatory for projects above ₹10 Lakh.

Note: Eligo publishes these regulatory and commercial exclusions directly from bank product guidelines and CGTMSE rules to protect MSME applicants from unexpected fee debits or loan rejection surprises.

What is PMEGP Manufacturing Enterprise Setup Loan (Up to ₹50 Lakh)?

Flagship credit-linked subsidy scheme administered by KVIC, KVIB, and DIC providing bank loans up to ₹50 Lakh for setting up new manufacturing enterprises with 15% to 35% government subsidy.

Key Benefits & Features

Up to 35% government capital subsidy (₹17.5 Lakh maximum subsidy); bank finances up to 90%–95% of project cost; own contribution only 5% to 10%.

Government Subsidy & Credit Guarantee Coverage

Margin Money Subsidy: 15% to 35% directly credited to subsidy reserve account

Enterprise Eligibility Criteria

Any individual above 18 years; at least 8th standard pass for manufacturing projects above ₹10 Lakh. Only new projects eligible.

Business VintageNew & Existing units eligible

Min. Annual TurnoverTurnover proportionate

Processing FeeNil for subsidy processing; nominal bank charges on loan

Prepayment TermsPrepayment permitted but subsidy locked for 3 years

How to Apply (3 Verified Paths)

💼Path 1: Current Account Portal

Apply online at kviconline.gov.in portal.

🌐Path 2: Official FinTech / Govt Portal

Submit project proposal on PMEGP e-Portal (kviconline.gov.in/pmegpeportal/).

🏢Path 3: SME Banking Center Walk-In

After online score generation, application is forwarded to applicant's selected financing bank branch.

Eligo does not collect business loan applications or financial data. Apply directly on the verified official domain:

Visit Official Portal↗

Documents Required Checklist

Detailed Project Report (DPR), Aadhaar, Caste/Category Certificate (for Special category 35% subsidy), Rural area certificate (for 35% subsidy), 8th pass certificate.

Frequently Asked Questions

What is the maximum subsidy under PMEGP manufacturing?

The maximum project cost is ₹50 Lakh. For Special Category borrowers in rural areas, the subsidy is 35% (maximum ₹17.50 Lakh).

Who qualifies for Special Category 35% subsidy?

SC, ST, OBC, Minorities, Women, Ex-Servicemen, Differently-Abled, and residents of NER, Hill and Border areas qualify for Special Category.

How does the Margin Money subsidy work?

The government subsidy is credited to a Subsidy Reserve Fund account with the financing bank, kept locked for 3 years, and adjusted against loan principal upon physical verification.

Is physical training required for PMEGP?

Yes, mandatory Entrepreneurship Development Programme (EDP) training (online or offline) must be completed before loan disbursement.