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

PMEGP Service & Business Enterprise Setup Loan (Up to ₹20 Lakh)

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

New service enterprise credit up to ₹20 Lakh with 15% to 35% government capital subsidy.

Connected Central Government Scheme: PMEGP through KVIC - Service & Business Enterprise Setup (Subsidy on ₹20 Lakh)View Government Scheme Guidelines →

Interest Rate8.50% – 10.50%Linked to EBLR / MCLR / Risk

Loan Amount QuantumUp to ₹20 Lakh (Subsidy 15%–35%)Based on turnover & project cost

Repayment TenureUp to 7 yearsWith moratorium where applicable

Collateral SecurityCollateral-free up to ₹10 Lakh; CGTMSE covered above ₹10 Lakh

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

Only greenfield service ventures eligible. Negative list applies (tobacco, alcohol, meat shops, non-biodegradable polythene units strictly ineligible).

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 Service & Business Enterprise Setup Loan (Up to ₹20 Lakh)?

PMEGP credit-linked capital subsidy program specifically for setting up new service and business ventures (diagnostics, repair centres, IT hubs, food catering, salons) up to ₹20 Lakh.

Key Benefits & Features

Up to 35% capital subsidy; borrower brings only 5% to 10% own equity; bank credit finances balance 90%–95%.

Government Subsidy & Credit Guarantee Coverage

Margin Money Subsidy: 15% to 35% (Max ₹7.0 Lakh in rural special category)

Enterprise Eligibility Criteria

Individuals above 18 years, 8th pass mandatory for service projects above ₹5 Lakh. Clean credit history.

Business VintageNew & Existing units eligible

Min. Annual TurnoverTurnover proportionate

Processing FeeNil for subsidy processing

Prepayment TermsZero prepayment penalty on floating rate loans

How to Apply (3 Verified Paths)

💼Path 1: Current Account Portal

Apply online at kviconline.gov.in/pmegpeportal.

🌐Path 2: Official FinTech / Govt Portal

🏢Path 3: SME Banking Center Walk-In

Forwarded to applicant-chosen bank branch after task force committee scoring.

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

Visit Official Portal↗

Documents Required Checklist

Service Project Profile / DPR, Aadhaar, Education Certificate (8th pass), Category certificate, Rural certificate (if applicable).

Frequently Asked Questions

What is the maximum subsidy for a service enterprise?

For service units, maximum project cost is ₹20 Lakh. The highest subsidy is 35% (₹7.0 Lakh) for Special category in rural locations.

Can a retail shop qualify under PMEGP service sector?

Retail trade of manufactured goods is generally excluded; service activities like service stations, repair workshops, labs, and cloud kitchens are eligible.

What education qualification is required for service loans above ₹5 Lakh?

The applicant must have passed at least the 8th standard examination.

What is the EDP training requirement?

Completion of Entrepreneurship Development Programme (EDP) of 5 days (for projects up to ₹5 Lakh) or 10 days (above ₹5 Lakh) is mandatory.