If you’re starting a business in India and need funding, three names come up again and again: PMEGP, Mudra Loan, and Stand-Up India. They’re not the same scheme wearing different names \u2014 each is built for a different kind of applicant and project size. Here’s exactly how they differ, and how to tell which one you should actually apply for.<\/em><\/p>\n\n\n\n The Prime Minister’s Employment Generation Programme (PMEGP) funds brand-new manufacturing units up to \u20b950 lakh and service or business units up to \u20b920 lakh, and \u2014 unlike a regular loan \u2014 a real portion of it is a subsidy you never repay.<\/p>\n\n\n\n General category applicants get a 15% subsidy in urban areas and 25% in rural areas. Special category applicants \u2014 which includes SC, ST, OBC, minorities, women, transgender persons, ex-servicemen, persons with disabilities, and applicants from the North-East or hill areas \u2014 get 25% in urban and 35% in rural areas.<\/p>\n\n\n\n Your own contribution is just 10% of the project cost for general category and 5% for special category; banks appraise and fund the rest. You must be at least 18, and for projects above \u20b910 lakh (manufacturing) or \u20b95 lakh (service), you’ll need at least a Class VIII education. Existing businesses aren’t eligible \u2014 this is strictly for new, viable units, applied for through KVIC, KVIB or your District Industries Centre, and completion of mandatory EDP training is required before the subsidy is released.<\/p>\n\n\n\n The Pradhan Mantri Mudra Yojana is built in tiers that match your business stage, not a fixed amount for everyone:<\/p>\n\n\n\n These loans are collateral-free (backed by the Credit Guarantee Fund), and women entrepreneurs typically get a 0.25\u20130.50% interest rate rebate. Apply through the Udyamimitra or JanSamarth portals, or directly at a bank branch, with KYC, Udyam Registration, and six months of bank statements \u2014 processing usually takes 7\u201315 working days.<\/p>\n\n\n\n This scheme is specifically for women entrepreneurs and SC\/ST applicants setting up a greenfield (first-time) enterprise in manufacturing, services or trading \u2014 it’s not for expanding an existing business or repaying old debt.<\/p>\n\n\n\n Loan amounts range from \u20b910 lakh to \u20b91 crore, with repayment tenure of up to 7 years including a moratorium period. You need to hold at least 51% ownership if it’s a partnership, be 18 or older, and have no history of defaulting on an institutional loan. Every bank branch is mandated to support at least one SC\/ST and one woman borrower under this scheme every year, so if you fit the eligibility, don’t hesitate to ask your branch directly.<\/p>\n\n\n\n As a rough rule: if your project needs under \u20b910 lakh and you want the fastest, most flexible option, start with Mudra. If your project is bigger and you qualify as a new unit, PMEGP’s subsidy makes it the most cost-effective route \u2014 you’re not just borrowing, you’re getting part of it free. If you’re a woman or SC\/ST entrepreneur with a larger greenfield project (\u20b910 lakh+), Stand-Up India is built for exactly that.<\/p>\n\n\n\n It’s also worth knowing these aren’t always mutually exclusive with private funding \u2014 many entrepreneurs combine a government scheme loan with personal savings or a small private loan to close the gap. Whichever route you choose, apply with a genuinely well-prepared project report; that document affects your approval odds more than almost anything else.<\/p>\n\n\n\n Can I apply for both PMEGP and Mudra loan for the same business?<\/strong><\/p>\n\n\n\n No \u2014 these schemes are meant to fund a project once through one route. You choose the scheme that best matches your project size and category, rather than applying to more than one for the same business.<\/p>\n\n\n\n Is collateral required for these government scheme loans?<\/strong><\/p>\n\n\n\n Mudra loans are collateral-free up to their full limit under the Credit Guarantee Fund. PMEGP and Stand-Up India typically don’t require collateral either for loans within the standard limits set by the relevant bank guidelines, though banks may ask for a personal guarantee.<\/p>\n\n\n\n How long does approval usually take?<\/strong><\/p>\n\n\n\n Mudra loans are the fastest, often 7\u201315 working days once documents are complete. PMEGP and Stand-Up India involve project appraisal and, for PMEGP, mandatory training before disbursal, so they typically take several weeks longer.<\/p>\n","protected":false},"excerpt":{"rendered":" PMEGP vs Mudra Loan vs Stand-Up India: Which Government Scheme Should You Apply For in 2026? 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If you’re starting a","magazineBlocksPostCategories":["Schemes"],"magazineBlocksPostViewCount":3,"magazineBlocksPostReadTime":4,"magazine_blocks_featured_image_url":{"full":["https:\/\/www.swarojgar.org\/wp-content\/uploads\/2026\/09\/government-schemes.png",1536,1024,false],"medium":["https:\/\/www.swarojgar.org\/wp-content\/uploads\/2026\/09\/government-schemes-300x200.png",300,200,true],"thumbnail":["https:\/\/www.swarojgar.org\/wp-content\/uploads\/2026\/09\/government-schemes-150x150.png",150,150,true]},"magazine_blocks_author":{"display_name":"Swarojgar","author_link":"https:\/\/www.swarojgar.org\/?author=1"},"magazine_blocks_comment":0,"magazine_blocks_author_image":"https:\/\/secure.gravatar.com\/avatar\/420d6fded385b477c92b35234f66992d80cc171e1d015c335935a8d4eb15e1ac?s=96&d=mm&r=g","magazine_blocks_category":"Schemes<\/a>","_links":{"self":[{"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=\/wp\/v2\/posts\/862","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=862"}],"version-history":[{"count":2,"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=\/wp\/v2\/posts\/862\/revisions"}],"predecessor-version":[{"id":865,"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=\/wp\/v2\/posts\/862\/revisions\/865"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=\/wp\/v2\/media\/863"}],"wp:attachment":[{"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swarojgar.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}PMEGP: Best for a New Manufacturing or Service Unit With a Subsidy<\/h3>\n\n\n\n
Mudra Loan (PMMY): Best for Very Small or Growing Micro-Businesses<\/h3>\n\n\n\n
\n
Stand-Up India: Best for Women and SC\/ST First-Time Entrepreneurs<\/h3>\n\n\n\n
So Which One Should You Apply For?<\/h3>\n\n\n\n
Frequently Asked Questions<\/h3>\n\n\n\n