Top Government Loan Schemes in India  2025

The Government of India has introduced various LOAN schemes aimed at boosting self-employment, encouraging entrepreneurship, and ensuring financial inclusion—especially for small business owners, women, farmers, and economically weaker sections Here’s a comprehensive breakdown of the most beneficial government-backed LOAN schemes in 2025.

1. Pradhan Mantri Mudra Yojana (PMMY)

Objective:

To empower youth and entrepreneurs by providing collateral-free LOANs for small businesses and start-ups.

LOAN Categories:

• Shishu LOAN: Up to ₹50,000
• Kishor LOAN: ₹50,001 to ₹5 lakh
• Tarun LOAN: ₹5 lakh to ₹10 lakh

Eligibility:

• Indian citizens looking to start a small business
• Should not be a defaulter or bankrupt

Interest Rate:

• Ranges between 8% to 12% (depends on the bank)

Required Documents:

• Aadhaar Card, PAN Card
• Passport size photograph
• Business Plan
• Bank Statement
• Proof of Residence

Tenure:

• Up to 5 years (can be extended in some cases)

Application Process:

• Apply online or offline via any participating bank
• Detailed information available on respective bank websites

2. Stand-Up India Scheme

Objective:

To provide financial support to women and SC/ST entrepreneurs for starting a new venture.

Key Features:

• It is mandatory for every bank branch to offer a LOAN to at least one woman and one person from the SC/ST category.

LOAN Amount:

• ₹10 lakh to ₹1 crore

Sectors Covered:

• Manufacturing
• Services
• Trading

Eligibility:

• Indian citizens aged 18 and above
• Must be SC/ST or a woman
• Should be starting a new business
• No previous loan defaults

Interest Rate:

• 7.5% to 9% (based on base rate of the bank)

Repayment Period:

• The repayment tenure can extend up to 7 years, with an optional grace period if needed

Required Documents:

• Aadhaar Card, PAN Card
• Caste Certificate
• Business Plan
• Last 6 months Bank Statement
• GST and UDYAM Registration (if applicable)

Application Process:

• Online: Visit www.standupmitra.in
• Offline: Submit documents at your nearest bank branch

Additional Support:

• Training, guidance, and marketing assistance

3. Kisan Credit Card (KCC) Scheme

Objective:

To offer timely and low-interest LOANs to farmers for agriculture and allied activities.

Launched:

• Introduced in 1998

Key Benefits:

• Up to ₹1.60 lakh without collateral
• Up to ₹3 lakh under general terms
• 3% interest subsidy for timely repayment
• Crop insurance under PM Fasal Bima Yojana

Eligibility:

• Individual farmers, tenant farmers, sharecroppers
• Dairy, poultry, fishery farmers

Required Documents:

• Aadhaar Card, PAN Card
• Land ownership/tenancy proof
• Crop or farming plan
• Bank passbook copy
• Passport size photo

Interest Rate:

• 7% annually (effective 4% after 3% subsidy)

Application:

• Complete your document submission either online or by visiting the bank.

4. Prime Minister Employment Generation Programme (PMEGP)

Objective:

To boost self-employment by supporting micro-enterprises in rural and urban areas.

Implementing Bodies:

• Khadi & Village Industries Commission (KVIC)
• Ministry of MSME

Eligibility:

• Age: 18 years and above
• Minimum 8th pass (for projects above ₹10 lakh)
• Applicable to individuals, SHGs, trusts, societies
• Not applicable for government employees or defaulters

Subsidy:

Category	Urban Area	Rural Area
General	15%	25%
SC/ST/OBC/Women/PH/Ex-servicemen	25%	35%

LOAN Limits:

• Manufacturing: Up to ₹25 lakh
• Services: Up to ₹10 lakh

Bank LOAN Coverage:

• 60%–75% of project cost

Applicant’s Contribution:

• 10% (General)
• 5% (Special Categories)

Required Documents:

• Aadhaar Card, PAN Card
• Passport size photo
• 8th grade marksheet
• Caste Certificate (if applicable)
• Business Plan
• Bank Passbook
• Residence Proof
• Udyog Aadhaar (post-approval)

Application Process:

• Online: Visit www.kviconline.gov.in
  • Click on “Apply for Individual”
  • Complete the form and attach your supporting documents.

Training:

• Conducted via KVIC or DIC centers

Bank Involvement:

• Application and project report sent to bank
• Subsidy transferred to bank post-approval

Example Businesses Eligible for LOAN:

• Paper/jute bag manufacturing
• Mushroom farming
• Mobile repair
• Beauty parlour
• Readymade garment unit
• Dairy, bakery
• Welding workshop
• Digital service center
• Fertilizer & seed shop

Note: Businesses involving narcotics or banned plastics are not eligible.

Benefits of These LOAN Schemes

• Collateral-free LOANs up to ₹25 lakh
• 15%-35% Government subsidy based on category
• Training and business development support
• Financial inclusion and self-reliance promotion
• Competitive interest rates

FAQs – Top Government LOAN Schemes in 2025

Q1. What are the top government LOAN schemes in 2025?
A: PMMY, Stand-Up India, KCC, and PMEGP are the major schemes aimed at promoting self-employment, women empowerment, and rural development.

Q2. How to apply for a MUDRA LOAN?
A: Visit any bank or apply online with Aadhaar, PAN, bank statement, and business plan.

Q3. What benefits do women entrepreneurs get under Stand-Up India?
A: Women can avail LOANs from ₹10 lakh to ₹1 crore without collateral under CGTMSE, along with business training and guidance.

Q4. Who is eligible for the Kisan Credit Card Scheme?
A: Any farmer—owner or tenant—can apply. They can get up to ₹3 lakh at 4% interest if repaid on time.

Q5. What businesses can be started under PMEGP?
A: Low-capital, high-demand businesses like jute bags, mushroom farming, mobile repair, bakery, dairy, tailoring, etc.

Q6. How much subsidy is provided under PMEGP?
A: 15%-25% for general category and up to 35% for SC/ST/OBC/Women/PH. Maximum LOAN of ₹26 lakh (manufacturing) and ₹11 lakh (services).

Final Thoughts

If you’re planning to start a new business, expand an existing one, or simply become financially self-reliant, these LOA schemes are a golden opportunity. Choose the right scheme, prepare your documents, and take the first step toward your entrepreneurial journey today.

These schemes are not just financial aid — they are stepping stones to building an Atmanirbhar Bharat.