Stand Up India Scheme vs PMEGP Loan: Which Is Better?

Whenever you think of starting a new business or want to expand an existing one, funds are a prominent factor that are invariably required for all the essential things like buying equipment for a manufacturing company, working capital, rent for the space, raw materials and other related expenses. To cover such expenses and to encourage entrepreneurs, the Government of India has introduced different schemes. These options are the Stand Up India Scheme and the Prime Minister’s Employment Generation Programme (PMEGP).

From the above, the Stand-Up India Scheme was mainly introduced and implemented for women and SC/ST entrepreneurs, especially for starting greenfield enterprises. Whereas, PMEGP was implemented to create employment through new micro-enterprises, especially in the non-farm sector, such as manufacturing. 

The loan amount, eligibility, and documents for both schemes are different. To understand them, let’s look at each one separately, including the differences like PMEGP loan interest rate, eligibility criteria, etc.

Difference Between Stand Up India Scheme and PMEGP

The main difference between the above can be based on the types of business and industry.  The Stand Up India scheme is mainly focused on women and SC/ST entrepreneurs, where the loan amount, depending on the creditworthiness, can vary from ₹10 lakh to ₹1 crore, especially for eligible greenfield businesses. It can cover manufacturing, services, trading and agriculture-related activities.

Similarly, PMEGP is a credit-linked subsidy programme which can be available for establishing new micro-enterprises and generating employment in both rural and urban areas. For such a loan scheme, any eligible entrepreneur can apply, and the approval can be subject to the scheme conditions.

Stand Up India Scheme:  A Brief Description

The Stand-Up India Scheme was launched in 2016 to promote entrepreneurship, especially among women and SC/ST communities. Under this scheme, eligible entrepreneurs could receive loans of ₹10 lakh to ₹1 crore through Scheduled Commercial Banks for new businesses in manufacturing, services, trading and agriculture-allied activities. The loan had a repayment facility of up to seven years, including a moratorium of up to 18 months, with at least 10% own contribution. The original scheme ended in March 2025, while a new scheme is under preparation 

PMEGP: Brief Description

The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme which is managed by the Ministry of MSME, with KVIC as the national nodal agency. It was introduced to support new micro-enterprises in the non-farm sector to promote employment. The maximum project cost eligible for subsidy is ₹50 lakh for manufacturing and ₹20 lakh for service or business projects, depending on the eligibility and other factors. The subsidy can range from 15% to 35%.

Difference Between Stand Up India and PMEGP

Some basic differences between the Stand Up India scheme and PMEGP 

As per the comparison,  the PMEGP scheme is currently more relevant, and it is available for eligible applicants, especially those willing to set up a new micro-enterprise.

Things to Consider Before Applying

If you are planning to apply for government business-finance schemes, you must look at the following factors and these are as follows.

• Check your proposed activity, and it must be covered under the selected scheme. Only then can you get the financial support.
• As per the estimate and budget, calculate the total cost of equipment, working capital, premises and other business requirements. Then apply accordingly.
• Depending on your own contribution, keep the required margin and money ready before applying.
• Under PMEGP, check the applicable subsidy percentage based on your category and project location. It helps you maintain your financial planning.
• Before applying, compare the PMEGP loan interest rate and other loan charges. With such insight, you can have precise ideas.
• Select a convenient repayment structure for your expected business. 
• Always verify whether the scheme is currently accepting applications and whether updated guidelines have been issued.

Eligibility Criteria for Stand-Up India Scheme & PMEGP

Documents Required

The exact documents can vary according to the bank, applicant category and type of business. Applicants should generally keep the following ready:

• Aadhaar card and other KYC documents
• PAN card
• Address proof
• Passport-size photographs
• Bank account details
• Educational qualification documents, where applicable
• Business or project report
• Details of proposed business activity
• Project cost and investment details
• Category certificate, where applicable
• Udyam registration details, where required
• Bank-related documents requested during loan processing

Conclusion

With the aforesaid information, you can have sufficient ideas for Stand Up India Scheme vs PMEGP Loan, especially depending on the applicant and business requirement. Where the original Stand-Up India Scheme was specifically designed to support women and SC/ST entrepreneurs starting greenfield businesses, with the loan amount ranging from ₹10 lakh to ₹1 crore. However, that original scheme ended on March 31, 2025. So currently, PMEGP is more directly relevant for eligible entrepreneurs who want to establish a new micro-enterprise and benefit from a credit-linked subsidy.