PMFME Scheme – Apply for the PMFME loan Scheme Online

The government launched the PMFME Scheme (Pradhan Mantri Formalisation of Micro Food Processing Enterprises) on June 29th, 2020, as part of the Atmanirbhar Bharat initiative. This scheme helps small (unorganised) food processing businesses by providing financial support through credit-linked subsidies.

This subsidy covers 35% of the total project cost. However, the PMFME loan scheme provides eligible applicants with a maximum amount of ₹10 lakh. Businesses can use this food processing business loan to expand, purchase equipment, and modernise production processes.

By offering this support, the government is helping local food brands become stronger and more competitive. Please note that several groups can benefit from the PMFME loan scheme. This includes:

• Individual food processing units
• Farmer Producer Organisations (FPOs)
• Self-Help Groups (SHGs)
• Cooperatives

In this article, let’s understand what is PMFME scheme in detail. 

Understanding the PMFME Scheme

The PMFME Scheme stands for Pradhan Mantri Formalisation of Micro Food Processing Enterprises. It is a government-backed initiative launched by the Ministry of Food Processing Industries to support small food businesses under the ‘Vocal for Local’ campaign.

This scheme has a total allocation of ₹10,000 crores. The central and state governments share the funding in a 60:40 ratio. However, for northeastern and Himalayan states, the ratio is 90:10.

The main goal of the PMFME Scheme is to help small food processing businesses by providing financial and technical support. This scheme also tries to formalise unorganised businesses so they become more structured.

What is ODOP Under the PMFME Scheme?

The PMFME Scheme follows the One District One Product (ODOP) approach. Under this system, each state identifies a specific food product commonly produced in a district. This product can be a:

• Perishable agricultural item
• Widely grown crop
• Cereal-based food product

Some common ODOP examples are: 

• Potatoes
• Pickles
• Mangoes
• Animal feed
• Meat
• Tomatoes
• Fisheries

In tribal areas, herbal products like turmeric and amla and honey and minor forest products also receive support.

By focusing on one key product per district, the PMFME Scheme helps businesses benefit from bulk purchasing of raw materialandas better marketing opportunities.

PMFME Scheme Subsidy

The PMFME Scheme provides several subsidy benefits to support micro-food processing businesses:

• It offers a 35% credit-linked capital subsidy on the total project cost. However, the maximum subsidy amount a business can receive is ₹10 lakh per unit.
• The scheme also provides ₹40,000 as seed capital to Self-Help Groups (SHGs). Using this amount, they can buy small tools and manage daily business expenses.
• Additionally, the PMFME Scheme covers 50% of branding and marketing costs, allowing businesses to promote their products and expand their market reach.

PMFME Scheme Benefits

Under the PMFME scheme, more than two lakh micro food processing units receive financial assistance in the form of:

• Subsidies
• Collateral-free loans
• Seed capitals

This support strengthens and formalises the micro-food processing industry. It also helps businesses grow by improving their skills, infrastructure, and market reach.

Key Features and Benefits of the PMFME Loan Scheme

The PMFME loan scheme offers flexible financial support that can be used to upgrade equipment, enhance operations, and increase productivity. This funding empowers entrepreneurs to modernise their processes and scale their businesses effectively. Let’s take a closer look at some of the key PMFME scheme benefits:

1. Financial Assistance with Subsidy

Under this scheme, businesses get a PMFME subsidy. The grant covers 35% of the total project cost (with a maximum limit of ₹10 lakh).

For example, consider a project that costs ₹20 lakh. Under the PMFME scheme, 35% of the project cost—amounting to ₹7 lakh—will be covered as a subsidy. The business owner must cover the remaining project cost through their own funds or a loan.

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2. Collateral-Free Loan for Food Businesses

The PMFME Scheme offers collateral-free loans through partnerships with banks and NBFCs. This makes it easier for food businesses to access funds, as there is no need to pledge assets.

3. Support for Branding and Marketing

The PMFME Scheme helps micro-enterprises establish their food brands by covering 50% of branding and marketing costs. This financial support allows businesses to reach more customers, which strengthens their market presence.

4. Capacity Building and Skill Training

Under the PMFME Scheme, entrepreneurs receive training in:

• Food safety
• Business management
• Quality standards

This training allows them to enhance product quality and meet regulatory standards.

5. Technology Upgradation for Better Production

In this scheme, the financial aid is provided for:

• Purchasing modern machinery
• Upgrading packaging
• Improving storage facilities

This further allows food businesses to boost production capacity and maintain product quality.

6. Cluster-Based Approach with ODOP Focus

The PMFME Scheme follows the One District One Product (ODOP) model. It encourages districts to specialise in a specific food product. Such an approach increases market demand, which lets businesses scale up their operations.

Eligibility Criteria for the PMFME Scheme

Who Can Apply?

The PMFME loan eligibility covers various individuals and organisations involved in food processing. Those who can apply for the PMFME scheme include:

Assistance provided under the PMFME Scheme	PMFME loan eligibility criteria
Common Infrastructure Development	FPOs, SHGs, and Cooperatives must be engaged in ODOP product processing for at least three years.FPOs and cooperatives must have a turnover of at least ₹1 crore and their project cost must not exceed their current turnover.SHGs, cooperatives, and FPOs must have internal funds to cover:10% of the project cost, andMargin money for working capital.
Branding and Marketing Assistance	Businesses can only propose branding and marketing plans for ODOP products.Products must have a minimum turnover of ₹5 crore and be sold in retail packaging.
Capacity Building and Research Support	Individual units and groups receiving capital investment support are eligible for this assistance.Also, existing businesses in districts processing ODOP products are eligible.
Support for Food Processing Units	The following businesses are eligible for this assistance:Individuals or partnership firms with ownership rights of the food processing business.Existing micro food processing units in operation and verified by a resource person.Applicants must be:At least 18 years old, andShould have completed at least the 8th standard in education.Only one person per family can apply for financial assistance. The family includes the applicant, spouse, and children.
Seed Capital for SHGs	Only SHG members currently involved in food processing can apply for seed capital. Applicants must commit to using the funds for:Working capital, andPurchasing small tools. They must also agree to this commitment with their SHG federation.

Who is Not Eligible?

Certain individuals and businesses cannot apply for the PMFME startup loan or other financial assistance under the scheme. These include:

• FPOs, SHGs, or cooperatives that are not engaged in ODOP product processing for at least three years.
• Businesses with project costs exceeding their current turnover.
• Individuals below 18 years of age or those without an 8th standard pass qualification.
• More than one applicant from the same family (self, spouse, or children).
• SHG members who do not commit to using the seed capital for business purposes.
• Food processing units that are not verified by a resource person

How to Apply for the PMFME Loan Scheme Online?

Entrepreneurs looking for a food processing business loan online can apply for the PMFME Scheme through a simple online process. 

Below is a step-by-step guide to the PMFME scheme application process:

Step 1: Register on the PMFME Portal

• Visit the official PMFME website.
• Click on the “Login” button located at the top right corner of the homepage.
• From the drop-down menu, select “Applicant Registration (New User).”
• Fill in these required details:
  • Name
  • Mobile number
  • Beneficiary type
  • Address
  • State
  • District
• Click on “Register” to create an account.

Step 2: Fill out the Online Application Form

• After successful registration, go to the PMFME website and click on “Applicant Login.”
• Enter the user ID and password, then click “Submit.”
• From the dashboard, select the “Apply Online” option.
• Fill in the PMFME scheme application form with the required details.
• Click “Submit” to complete the application process.

By following this PMFME scheme application process, businesses can easily access financial support for their food processing business.

Documents Required for PMFME Loan Application

To successfully apply for a PMFME loan, applicants must provide certain documents that are a part of the PMFME loan application checklist. These documents allow the government to verify the applicant’s:

• Identity
• Address
• Business details

Below is a list of the documents required for a PMFME loan:

• The completed PMFME application form with two passport-size photographs.
• Identify proof in the form of a driving license, Aadhaar card, voter ID card, or passport.
• Address proof in the form of a voter ID card, Aadhaar card, or driving license.
• A Detailed Project Report (DPR) that shows the project details and estimated costs.
• Additional documents (it depends on the loan sanctioning authority)

Conclusion

The PMFME scheme offers government funding for food startups. It allows applicants to cover 35% of the total project cost, up to a maximum amount of ₹10 lakh. The government offers this financial assistance without any collateral. Applicants can use this amount to invest in:

• Equipment
• Infrastructure
• Branding

Business owners can easily complete the application process online through the PMFME portal or at registered banks and NBFCs.

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PMFME Scheme FAQs