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The PM Formalization of Micro Food Processing Enterprises (PMFME) Scheme is a government initiative in India aimed at boosting the micro food processing sector. Designed to support individuals, groups, and small businesses, the scheme offers access to loans and credit-linked subsidies to establish or upgrade food processing units. Lets Understand with a Help of a General Conversation of Two Friends Aahil & Vivaan

Vivaan: Hey Aahil, I’m thinking of starting a small food processing unit, and I came across the PMFME Loan scheme. Have you heard about it?

Aahil: Absolutely! It’s a great initiative for aspiring entrepreneurs like us. So, what kind of unit are you thinking of setting up?

Vivaan: I’m passionate about making pickles and chutneys with my grandmother’s recipes. I think there’s a good market for authentic, high-quality products like mine.

Aahil: Sounds delicious! The PMFME Loan can definitely help you get started. Let’s break down the details:

Loan Amount:

  • Individuals and proprietors can get up to Rs. 10 lakhs.
  • Partnerships, FPOs, NGOs, Cooperatives, SHGs, and Pvt. Ltd. companies can get up to Rs. 2 crores.

Loan Tenure:

  • The maximum repayment period is 10 years, including a moratorium of 6-24 months.

Interest Rate:

  • The interest rate depends on the bank, but it’s generally based on the External Benchmark Lending Rate (EBLR)plus a mark-up.
  • For example, SBI offers loans under this scheme starting from 40% p.a.(as of February 2024).


  • Here’s the exciting part! You get a credit-linked capital subsidy of 35% of the eligible project cost, with a maximum of 10 lakhs.
  • This means the government essentially reduces your loan amount by a significant chunk!

Vivaan: Wow, that subsidy is a huge help! So, what are the eligibility criteria?

Aahil: It’s open to individuals, proprietors, partnerships, FPOs, NGOs, Cooperatives, SHGs, and Pvt. Ltd. companies involved in micro food processing activities.

  • You need to have a viable business plan and meet the bank’s specific eligibility criteria.

Vivaan: Okay, that sounds doable. What about the application process?

Aahil: You can apply directly to any participating bank. They have dedicated PMFME Loan counters to assist you.

  • You’ll need to submit documents like your business plan, identity proof, address proof, and other required documents.

Vivaan: This seems like a fantastic opportunity. Thanks for explaining everything, Aahil! I’m definitely going to explore this further.

Aahil: No problem, Vivaan! Remember, besides the loan, the scheme also offers support in marketing, branding, and training.

  • It’s a comprehensive package to help your food processing dream take off!

Vivaan: That’s amazing! I’m feeling motivated and confident now. Cheers to new beginnings!

Aahil: Cheers to that! Good luck with your pickle business, Vivaan. I can’t wait to taste your delicious creations!

Additional Points:

  • This conversation is just a starting point. Remember to research specific details and terms with your chosen bank.
  • The PMFME scheme website ( offers comprehensive information and resources.
  • Don’t hesitate to seek professional guidance if needed.

Conclusion: The PMFME Loan emerges as a game-changer, reducing financial barriers for micro food processing entrepreneurs. Aahil and Vivaan’s conversation highlights the scheme’s attractive features, such as substantial subsidies, flexible repayment, and comprehensive support beyond just financing. Aspiring food entrepreneurs should explore this opportunity to kickstart their ventures with confidence and government-backed support.

I hope this detailed conversation helps you understand the PMFME Loan scheme better!

Author Bio

Greetings to Everyone, I am Practising Chartered Accountant from Thane,Maharashtra, Proprietor of Bhavik Chudasama & Co, Chartered Accountants.Having been in this Industry from 2009 years I expertise in the Field of VAT, Income Tax Return Filing, Tax Audit, Income Tax Scrutiny , Drafting of A View Full Profile

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