A Detailed Overview of PMFME Loan Scheme

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PMFME Loan: The Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME) loan scheme is a transformative initiative aimed at bolstering the food processing sector in India. Targeting various groups such as Farmer Producer Organizations (FPOs), Self-Help Groups (SHGs), Cooperatives, and Government Agencies, the scheme provides crucial financial assistance and support to establish and upgrade food processing units across the nation. In this comprehensive overview, we delve into the intricacies of the PMFME scheme, its key components, and the transformative impact it aims to achieve.

Credit-Linked Capital Subsidy

Under the PMFME scheme, eligible entities such as FPOs, FPCs, Cooperatives, SHGs, and Government Agencies proposing to establish food processing lines are entitled to a credit-linked capital subsidy of 35% of the eligible project cost, capped at Rs. 3.00 Crore. This subsidy serves as a vital financial boost, facilitating the establishment of modern food processing infrastructure and value chains.

Similarly, individuals, proprietorships, partnerships, NGOs, and private limited companies are eligible for a credit-linked capital subsidy of 35% of the eligible project cost, with a maximum subsidy of Rs. 10.0 lakhs per unit for upgrading or setting up new units. This provision aims to encourage entrepreneurship and innovation in the food processing sector, fostering economic growth and employment opportunities.

Seed Capital for SHGs

The PMFME scheme recognizes the pivotal role of Self-Help Groups (SHGs) in grassroots empowerment. To support their endeavors, SHGs are provided seed capital at Rs. 40,000 per member for working capital and purchase of small tools, with a maximum limit of Rs. 4 Lakhs per SHG. This seed capital, granted to SHG federations by State Rural Livelihood Missions (SRLM) or State Urban Livelihood Missions (SULM) through State Nodal Agencies (SNA), enables SHG members to embark on entrepreneurial ventures in the food processing domain.

Capacity Building Component A critical aspect of the PMFME scheme is its emphasis on capacity building. Through the Food Processing Entrepreneurship Development Programme, beneficiaries receive comprehensive training, equipping them with the necessary skills and knowledge to thrive in the competitive food processing landscape. This initiative not only enhances individual capacities but also fosters innovation and excellence across the sector.

One District One Product (ODOP) Approach

To harness the benefits of scale and streamline operations, the PMFME scheme adopts the One District One Product (ODOP) approach. By identifying unique products and aligning support infrastructure, this approach promotes value chain development, facilitates efficient procurement of inputs, and enhances marketing opportunities. With ODOP approved for 713 districts across 35 States/UTs, the scheme catalyzes localized economic development and empowers local communities.

Branding and Marketing Support

Recognizing the significance of branding and marketing in promoting processed food products, the PMFME scheme offers a 50% financial grant for Branding and Marketing Support. Groups of FPOs, SHGs, Cooperatives, or Special Purpose Vehicles (SPVs) of micro food processing enterprises can leverage this support to enhance brand visibility and expand market reach. By facilitating effective marketing strategies, the scheme enables small-scale enterprises to compete in the global marketplace.


The PMFME loan scheme stands as a beacon of hope for the food processing sector, offering a comprehensive framework for growth, innovation, and inclusivity. By providing financial assistance, capacity-building initiatives, and strategic support, the scheme empowers diverse stakeholders to realize their entrepreneurial aspirations and contribute to India’s economic prosperity. As the nation strides towards self-reliance and sustainability, the PMFME scheme emerges as a catalyst for transformative change in the food processing landscape.

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