A Closer Look at Axis Bank’s Role in the PMEGP Scheme
The dream of starting one’s own business is a powerful engine for economic growth. Recognising this, the Government of India launched the Prime Minister’s Employment Generation Programme (PMEGP), a flagship credit-linked subsidy scheme aimed at fostering self-employment and micro-enterprises across the nation.1
As one of the prominent financial institutions in India, Axis Bank plays a crucial role in implementing this scheme, helping aspiring entrepreneurs translate their business ideas into reality with substantial financial support.
What is the PMEGP Scheme?
PMEGP is a collaboration between the Ministry of Micro, Small and Medium Enterprises (MoMSME) and financial institutions like Axis Bank. Its primary goal is to generate employment in both rural and urban areas by facilitating the establishment of new micro-enterprises in the non-farm sector.2
The core benefit of the PMEGP is the Margin Money (MM) subsidy, which is routed through the Khadi and Village Industries Commission (KVIC) and eventually transferred to the entrepreneur’s account by the financing bank.3
Key Features of Axis Bank PMEGP Loan
Axis Bank, along with other banks, provides the term loan and working capital to PMEGP beneficiaries, with the government subsidy significantly reducing the actual loan burden.
| Feature | Details (For New Enterprises) |
| Maximum Project Cost | Manufacturing: ₹50 Lakhs |
| Business/Service: ₹20 Lakhs | |
| Financing Structure | Bank Loan: 60% to 75% of the total project cost (after deducting the beneficiary’s contribution and subsidy). |
| Beneficiary’s Contribution | General Category: 10% of the project cost |
| Special Category (SC/ST, Women, OBC, Minorities, etc.): 5% of the project cost | |
| Subsidy (Margin Money) | Ranges from 15% to 35% of the project cost, depending on the category and location (Rural/Urban). |
| Repayment Tenure | Generally ranges from 3 to 7 years, after an initial moratorium period prescribed by the bank. |
| Interest Rate | The interest rate is as per the prevailing Bank rates and Axis Bank’s internal policy for PMEGP schemes. |
The Power of Subsidy
The Margin Money subsidy is the scheme’s greatest attraction. For instance:
- General Category applicants can receive a subsidy of 15% (Urban) or 25% (Rural) of the project cost.4
- Special Category applicants can receive an even higher subsidy of 25% (Urban) or 35% (Rural).5
This subsidy amount is kept in a Term Deposit Receipt (TDR) for three years, after which it is adjusted towards the loan, significantly reducing the borrower’s liability.6
Eligibility and Application Process
To avail the PMEGP loan through Axis Bank, applicants must meet the scheme’s standard criteria:
- Age: Must be 18 years or above.
- Education: For projects exceeding ₹10 Lakh (Manufacturing) or ₹5 Lakh (Service/Business), the applicant must have passed at least Class VIII.7
- Nature of Project: Only new projects are eligible. Units that have already availed subsidy under any other Central/State Government scheme are excluded.8
- Entities: Individuals, Self Help Groups (SHGs), Production Co-operative Societies, Charitable Trusts, and Institutions registered under the Societies Registration Act, 1860, are eligible.9
How to Apply
The PMEGP application process is primarily online, though the final steps involve interaction with the bank:
- Online Application: The applicant must first apply on the official PMEGP e-portal (managed by KVIC).10
- Bank Selection: During the online application, the applicant specifies the preferred financing bank, such as Axis Bank.11
- Agency Review: The application is reviewed by the Nodal Agency (KVIC/KVIB/DIC).12
- Bank Appraisal: Once recommended, the application is forwarded to the selected Axis Bank branch for financial appraisal, sanction, and disbursement. The bank assesses the project’s viability and creditworthiness.
- EDP Training: The beneficiary must undergo Entrepreneurship Development Programme (EDP) training, which is mandatory before the release of the second instalment of the loan.13
Axis Bank: A Partner in Growth
Axis Bank serves as a critical bridge between the government’s visionary scheme and the grassroots entrepreneur. The bank’s extensive network and streamlined processes ensure that the credit-linked subsidy reaches the beneficiaries efficiently. By actively participating in PMEGP, Axis Bank not only fulfils its priority sector lending commitments but also contributes directly to India’s mission of creating a vast ecosystem of successful micro-enterprises and, consequently, generating millions of jobs.
If you are an aspiring entrepreneur with a viable project plan, leveraging the PMEGP scheme through a trusted partner like Axis Bank could be the definitive step towards establishing your own successful venture.
Would you like to search for the nearest Axis Bank branch or the official PMEGP portal link?
