**Policy Summary: Enhancing Credit Flow to PMEGP Beneficiaries in Rural Areas**
The Ministry of Micro, Small and Medium Enterprises (MSME) has implemented several measures to improve outreach, application processing time, and credit flow to beneficiaries of the Prime Minister's Employment Generation Programme (PMEGP), particularly in rural areas. These initiatives, effective as of August 21, 2025, and in some cases earlier, include:
* **Special Category for Rural Beneficiaries:** Rural beneficiaries are classified under a special category, entitling them to higher subsidy rates and reduced contributions to project costs. As a result, 80% of total units assisted under PMEGP are located in rural areas.
* **Awareness Programs:** Conduct awareness programs across all States/Union Territories, with a focus on backward, underperforming, and aspirational districts, as well as the Northeastern Region.
* **Regional Language Applications:** Acceptance of PMEGP applications in 11 regional languages (Gujarati, Malayalam, Punjabi, Manipuri, Bangla, Marathi, Tamil, Assamese, Kannada, Oriya, and Telugu) since January 2024. This excludes Hindi and English.
* **Free Entrepreneurship Development Program (EDP):** A free two-day online EDP is conducted for prospective entrepreneurs.
* **Model Project Reports:** Over 1,000 Model Detailed Project Reports are available on the PMEGP online portal.
* **Modified Negative List:** The negative list has been revised to include activities such as dairy, poultry, aquaculture, insects/bees, and sericulture under Animal Husbandry.
* **Collateral-Free Loans:** Banks are advised to not insist on collateral security for projects with loans up to ₹10 lakh, in accordance with Reserve Bank of India (RBI) guidelines.
* **Dedicated Tracking Portal:** A dedicated online portal is used to track the entire application process.
* **Bankers Review Meetings:** Review meetings are conducted at the Ministry, State, and zonal levels.
* **Technical Expert Support:** Retired bank officials provide handholding support to prospective PMEGP beneficiaries during the application stage.
* **Implementing Agency Reviews:** Periodical review meetings are held with implementing agencies, including State offices of Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Boards (KVIBs), State District Industries Centres (DICs), and financial institutions.
Key Entities Referenced
PMEGP: Prime Minister's Employment Generation Programme, a credit-linked subsidy program to promote self-employment
SUSHRI SHOBHA KARANDLAJE: Minister of State for Micro, Small and Medium Enterprises
Aspirational districts: Underperforming districts identified for focused development efforts
Northeastern Region: The easternmost region of India comprising of eight states.
KVIC: Khadi and Village Industries Commission, a statutory body promoting khadi and village industries
State KVIBs: State Khadi and Village Industries Boards, agencies at the state level implementing KVIC programs
State DICs: State District Industries Centres, agencies at the district level promoting industries
RBI: Reserve Bank of India, the central bank of India
GOVERNMENT OF INDIA
MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES
LOK SABHA
UNSTARRED QUESTION No.4625
TO BE ANSWERED ON 21.08.2025
CREDIT FLOW TO PMEGP BENEFICIARIES
4625. SHRI K E PRAKASH:
Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:
(a) whether any special measures are being taken to improve outreach, application processing time
and credit flow to PMEGP beneficiaries in rural areas; and
(b) if so, the details of such initiatives and their expected impact?
ANSWER
MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES
(SUSHRI SHOBHA KARANDLAJE)
(a) and (b): Measures taken by Government to improve outreach, application processing time and
credit flow to beneficiaries, especially in rural areas under PMEGP include the following:
i. Under PMEGP, beneficiaries belonging to rural areas are covered under special category of
beneficiaries who are eligible for higher rate of subsidy and lower own contribution to the
project cost. Consequently, 80% of the total units have been assisted in rural areas.
ii. Awareness programmes in all the States/UTs including backward and under-performing areas,
Aspirational districts, Northeastern Region etc.
iii. Acceptance of PMEGP applications from beneficiaries in physical form in 11 regional
languages since January 2024 excluding Hindi and English i.e., Gujarati, Malayalam, Punjabi,
Manipuri, Bangla, Marathi, Tamil, Assamese, Kannada, Oriya and Telugu to improve outreach
especially in rural areas.
iv. Conduct of two-days free online Entrepreneurship Development Programme (EDP) for
prospective entrepreneurs.
v. A wide range of more than 1,000 Model Detailed Project Reports have been prepared on
various industries and made available on the PMEGP online portal to improve the quality of
project proposals.
vi. Negative List has been modified to allow more activities such as dairy, poultry, aquaculture,
insects (bees, sericulture, etc.) under Animal Husbandry to be permitted under the Scheme.
vii. Banks have been advised not to insist collateral security for projects involving loan up to 10
lakh as per RBI guidelines to improve credit flow to beneficiaries.
viii. A dedicated portal for tracking the complete process from application till adjustment of MM
subsidy into the beneficiary’s loan account to improve efficiency and transparency.
ix. Banker’s Review meetings conducted at Ministry, State and zonal level to ensure proper
sanctioning of loans without delays and disbursement of margin money.
x. Technical experts & Retired Bank Officials have been engaged to provide handholding support
to prospective PMEGP beneficiaries during application stage.
xi. Periodical review meetings with Implementing Agencies i.e. State offices of KVIC, State
KVIBs, State DICs and financial institutions to strengthen the implementation of the scheme.
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