Government-backed project loans are financing products designed and supported by central and state governments to promote entrepreneurship, employment generation, and business development across India. These loans carry subsidized interest rates, reduced collateral requirements, and credit guarantee coverage, making entrepreneurship accessible to first-generation entrepreneurs, women, and marginalized communities.
Enjoy lower interest rates compared to private loans, often ranging from 8.85% to 12% depending on the scheme.
Schemes like PMMY and CGTMSE offer loans without the need for pledging assets or third-party guarantees.
Programs like PMEGP offer margin money subsidies ranging from 15% to 35% of the project cost.
Excellent opportunity for first-time entrepreneurs to enter the formal banking system and build a credit history.
Launched in 2015, PMMY provides non-collateral business loans to micro-entrepreneurs in the non-corporate, non-farm sector. It aims to provide formal banking access to the unbanked.
| Category | Loan Amount | Purpose |
|---|---|---|
| Shishu | Up to Rs. 50,000 | Smallest loans for first-time entrepreneurs |
| Kishor | Rs. 50,000 - Rs. 5 Lakh | Growing businesses needing expansion capital |
| Tarun | Rs. 5 Lakh - Rs. 10 Lakh | Established businesses seeking significant capital |
| Tarun Plus | Rs. 10 Lakh - Rs. 20 Lakh | High-growth enterprises requiring substantial funds |
PMEGP is a credit-linked subsidy programme aimed at generating self-employment through the setting up of micro-enterprises in the non-farm sector.
| Category | Rural Subsidy | Urban Subsidy | Beneficiary Contribution |
|---|---|---|---|
| General | 25% | 15% | 10% of Project Cost |
| Special (SC/ST/Women/OBC) | 35% | 25% | 5% of Project Cost |
| Feature | PMMY (Mudra) | PMEGP | Stand-Up India |
|---|---|---|---|
| Government Support | None (Access only) | 15% - 35% Subsidy | Refinance |
| Target Group | Micro Enterprises | New Ventures | SC/ST & Women |
| Max Loan | Rs. 20 Lakh | Rs. 50 Lakh | Rs. 1 Crore |
| Margin Money | Nil (for Shishu) | 5% - 10% | 10% - 25% |
| Tenure | Up to 7 Years | 3 - 7 Years | Up to 7 Years |
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