PMEGP loan eligibility: who can apply and who cannot

PMEGP loan eligibility at a glance

This page covers individual applicants for a new unit. The tests come from the scheme's eligibility panel on the PMEGP portal (PMEGP portal to PMEGP portal).

Meeting these tests makes you eligible for the scheme. The bank still appraises the project and takes its own credit decision on its viability (PMEGP guidelines compendium).

The age limit

The portal says any individual above 18 can apply (PMEGP portal). It states no upper age limit. Some state agency pages and websites print an upper age, but we found none in the current portal text, so we do not claim one.

The education rule

Class VIII is needed only for larger projects. A project above ₹10,00,000 in manufacturing, or above ₹5,00,000 in business or services, needs an applicant who has passed Class VIII. Below those costs, no education test applies (PMEGP portal).

New projects only

PMEGP is for new enterprises. Existing units under older schemes, and units that already took a government subsidy, are not eligible (PMEGP portal). A project must spend on capital items such as machinery or a workshop, and a project without capital expenditure is not financed (PMEGP portal).

The cost of a ready-built shed, or of a long lease or rented workshop, can count in the project cost, but only for a maximum of three years (Ministry of MSME annual report 2025-26, PMEGP portal). A project financed jointly by two lenders is not eligible for the subsidy (PMEGP guidelines compendium).

Trading and retail projects

Pure trading is allowed in only some cases (PMEGP portal):

• sales outlets in the North Eastern Region, Left Wing Extremism-affected districts and the Andaman and Nicobar Islands;
• retail outlets selling Khadi and village industry products, and products of PMEGP units;
• retail outlets backed by a manufacturing or service facility.

The maximum project cost for trading is ₹20,00,000, the same as for services.

Who is not eligible

• an existing unit, or a unit that already took a government subsidy (PMEGP portal);
• a second person from the same family for a new enterprise (PMEGP portal);
• a project without capital expenditure (PMEGP portal);
• a project financed jointly by two lenders, for the subsidy (PMEGP guidelines compendium);
• an activity on the negative list of the guidelines.

The negative list in the Delhi KVIB copy of the guidelines covers meat processing, intoxicants such as beedi, pan and cigarettes, hotels and dhabas serving liquor, tobacco, toddy, crop and plantation cultivation, and polythene bags below 20 microns (PMEGP guidelines compendium). That copy also lists animal husbandry, such as pisciculture, piggery and poultry. It may come from an older version of the guidelines. Ask the implementing agency for the current list before you plan such a project.

Nodal and implementing agencies

KVIC is the national nodal agency. Its state offices, the State Khadi and Village Industries Boards and the District Industries Centres implement the scheme. The Coir Board does so for coir units (PIB press release, PMEGP guidelines compendium). You choose the agency when you apply.

Second loan: eligibility for an existing unit

An existing PMEGP, REGP or Mudra unit can apply for a second loan. The first loan must have been repaid in the stipulated time, the unit must have made a profit for the last three years, and Udyam registration is compulsory. You can apply to the same bank or another bank (PMEGP portal, Ministry of MSME annual report 2025-26).

Is a CIBIL score required for PMEGP?

The scheme publishes no minimum CIBIL score. The bank appraises the project and takes its own credit decision (PMEGP guidelines compendium). A bank is likely to look at your credit record, as it does for any loan, but the number is the bank's own.

Rural or urban units

Neither is excluded. The place decides the subsidy rate, not eligibility: Panchayati Raj areas are rural and municipal areas are urban (PIB press release). A unit in a rural area earns the higher subsidy rate (PIB press release).

Special category and what changes

Special-category applicants pay less of their own money and get a larger subsidy. Aspirational district and transgender applicants are in the special category (Ministry of MSME annual report 2025-26). See the PMEGP subsidy guide for the rates.

A quick checklist before you apply

1. You are above 18, and no one else in your family has applied for a new unit (PMEGP portal).
2. You have passed Class VIII if the project is large (PMEGP portal).
3. The project is new, spends on capital items and keeps land cost out (PMEGP portal).
4. You have not taken a government subsidy for this unit before (PMEGP portal).
5. You are ready to register the unit on Udyam (PMEGP portal).
6. You can attend, or have already completed, EDP training (PMEGP guidelines compendium).
7. You know which agency, and which bank, you will approach (PMEGP guidelines compendium).

If every line holds, you meet the scheme's tests. The bank still decides on the loan (PMEGP guidelines compendium).

Your next step

A bank decides every PMEGP loan, so a clear plan and clean records help. Run the free loan readiness check to see how a lender may read yours. Then read the PMEGP guide, the PMEGP documents list and the Udyam registration guide. New founders can also read business loans for startups and new businesses.