Saiph Business Solutions LLP
Saiph Business Solutions LLP
Financial Services

 Prime Minister Formalization of Micro Food Processing Enterprises (PMFME) 

The Prime Minister Formalization of Micro Food Processing Enterprises (PMFME) scheme is a transformative initiative by the Government of India to uplift micro food entrepreneurs and catalyze the growth of the food processing sector. Launched with the vision of fostering a robust and competitive environment, PMFME offers a range of benefits to eligible enterprises.

Key Features:

1. Financial Assistance:

Unlock the potential of your micro food processing business with access to collateral-free loans, subsidies, and financial support tailored to your specific needs.

  • Loan Amounts: Collateral-free loans for micro food enterprises, providing financial assistance to meet working capital and investment requirements.

    • Up to Rs. 10 lakhs for working capital needs.
    • Up to Rs. 50 lakhs for the establishment, modernization, or expansion of micro food processing units.
  • Subsidies: Substantial subsidies for eligible activities, reducing the financial burden on entrepreneurs.

    • Up to 35% subsidy on the total project cost for general categories.
    • Up to 50% subsidy for SC/ST entrepreneurs, women, and entrepreneurs from the North-Eastern region.
  • Margin: Minimum of 10% of the project cost.

  • Quantum of Loan:
    • Minimum loan: No ceiling
    • Maximum loan: No ceiling
  • Repayment: Max. 10 years, including a maximum moratorium of 6-24 months.
  • Security: As per Bank’s extant guidelines.
  • Interest rate:
    • For Eligible MSME Entities:
      • Loan up to Rs. 2 Cr: EBLR (External Benchmark based Lending Rate) +200 bps.
      • Loan above Rs. 2 Cr: As per Bank’s extant guidelines.
    • For Other Categories (FPOs/ SHGs/ Producer Cooperatives):
      • Loan up to Rs. 50 lakhs: EBLR +360 bps
      • Loan above Rs. 50 lakhs: As per Bank’s extant guidelines.
  • Upfront fee: As per Bank’s extant guidelines, subject to revision by the bank from time to time.

2. Formalization Support:

Embrace formal business operations with assistance in meeting quality standards, obtaining certifications, and enhancing overall competitiveness.

  • Quality Standards: Support for adopting quality management standards, including certifications that boost the credibility of your products.
  • Technical Assistance: Expert guidance on formalizing operations, ensuring compliance with regulatory requirements.

3. Skill Development:

PMFME emphasizes skill development programs to empower entrepreneurs with the knowledge and expertise needed for sustained growth in the food processing industry.

  • Training Programs: Access to skill development and training initiatives to enhance the capabilities of your workforce.
  • Capacity Building: Workshops and seminars focused on building technical and managerial skills in the food processing domain.

4. Incentives for Startups:

If you're launching a new venture, PMFME offers a range of incentives and benefits to kickstart your entrepreneurial journey in the food sector.

  • Startup Incentives: Special incentives and support for startups, encouraging innovation and new entrants in the food processing industry.
  • Incubation Support: Access to incubation facilities and mentorship programs to guide startups through the initial stages of business development.

Eligible Entities:

Individual entrepreneurs/ Proprietorship Firms/ Partnership Firms/ Farmer Producer Organizations (FPOs)/ NGOs/ Cooperatives/ SHGs/ Pvt. Ltd. Companies, who have established or propose to establish micro food processing units.

Documents Required:

  • Application Form
  • Two Passport Size Photographs.
  • ID proof such as Driving License/ Aadhar Card/ Voter Identity Card/ Passport.
  • Address Proof such as voter ID card, Driving License, Aadhar Card.
  • Detailed Project Report (DPR)
  • Any other document as per sanction.

ODOP Brands and State Brands:

  • List of ODOP brands and State brands launched under PMFME. 

Marketing and Branding Support:

  • 50% grant for Groups to develop a common brand, standardization, and packaging.
  • Benefits include product standardization, trademark registration, market study, etc.

Individual Beneficiaries:

  • Opportunity to come under created brands if in a similar product line.
  • Support for branding, market linkages, processing, product development, and logistics.

Agriculture Infrastructure Fund (AIF) and Animal Husbandry Infrastructure Development Fund (AHIDF)


  • Interest subvention of 3% per annum up to Rs. 2 Crore.
  • Credit guarantee coverage for eligible borrowers.


  • Interest subvention of 3% per annum.
  • DAHD pays interest subvention directly to the scheduled bank.

Interest Subvention/Top-Up Assistance

1. Interest Subvention for SC/ST:

  • SC/ST beneficiaries eligible for refinancing support from NSFDC & NSTFDC.
  • Beneficiaries advised to choose partner banks of NSFDC/NSTFDC.

2. Interest Subvention through AIF and AHIDF:

  • AIF and AHIDF schemes provide 3% interest subvention.
  • Beneficiaries can apply through respective portals.

3. Top-Up Grant in Convergence with Other Schemes:

  • Applicants eligible for bank loan even if availed loan in other government schemes.
  • Top-up grant can be availed without duplicating benefits.

Loan Processing and Disbursement Process

VIII. Scrutiny by Processing Centre:

  • Processing Centre scrutinizes documents & completes loan appraisal formalities.
  • Loan is sanctioned by the appropriate authority, and the Branch conveys the sanction.

IX. Sanction Letter Issued:

  • Branch issues sanction letter to the applicant.
  • Branch uploads sanction letter on PMFME Portal.

X. Second Preferred Bank:

  • If the first preferred bank rejects, the application moves to the second preferred bank.
  • Second bank completes all formalities detailed for the first bank.

XI. Disbursement:

  • Disbursement starts as per sanction terms.
  • Upon disbursement, details are uploaded on PMFME portal.
  • MoFPI requests State to release its share and releases Centre's share to Nodal Bank.

Key Points:

  • No collateral security required for PMFME loans up to Rs. 2.00 Crores.
  • Mortgage of land/plot required for technical construction.
  • Updated DPR/documents can be uploaded to avoid rejection.
  • Service Area not applicable in PMFME scheme.