Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme

PM-FME (Pradhan Mantri Formalisation of Micro Food Processing Enterprises) is a Ministry of Food Processing Industries scheme launched on 29 June 2020 under the Aatmanirbhar Bharat Abhiyan. It gives existing micro food processing units, FPOs, cooperatives and Self Help Groups a 35% credit-linked capital subsidy (up to ₹10 lakh), plus seed capital, training and branding support, to help them formalise and grow.

Each state identifies one processed food product per district — usually a perishable like a fruit, vegetable, spice, fish product, honey or turmeric. Existing units on any product can apply, but a brand-new unit is funded only if it will process that district’s declared ODOP product.

A credit-linked capital subsidy of 35% of the eligible project cost, capped at ₹10 lakh per unit. You contribute a minimum 10% of the project cost yourself; the rest comes as a bank loan, and the subsidy is adjusted against that loan.

It works through your bank loan. The subsidy is credited to a “mirror” account against your loan; if your account stays standard (not NPA) for 3 years and the unit is operational, that amount is adjusted against your loan principal — effectively becoming a grant on that portion, with no interest charged on it from the date the bank received it.

For the individual category: an unincorporated enterprise (proprietorship or partnership) employing fewer than 10 workers, already in operation, with the applicant holding ownership rights.

Yes, but only if it will process your district’s declared ODOP product — new units on non-ODOP products are not funded under the scheme.

₹40,000 per SHG member for working capital and small tools. It is paid as a grant to the SHG federation, which then gives it to members as a repayable loan. Priority goes to SHGs working on the district’s ODOP product.

Yes. An individual SHG member can be supported as a single food-processing unit with the same 35% credit-linked grant (max ₹10 lakh) that individual applicants get — this is separate from, and in addition to, the ₹40,000 seed capital route.

Farmer Producer Organisations and producer cooperatives get a 35% credit-linked grant for capital investment, provided they have a minimum turnover of ₹1 crore, the proposed project cost does not exceed their current turnover, and members have at least 3 years’ experience with the product.

Funding (35% credit-linked grant) for shared facilities — farm-gate sorting, grading and cold storage, common processing units for the ODOP product, and incubation centres that smaller units can hire. It goes to FPOs, SHGs, cooperatives, government agencies or private enterprises, and the facility must be run commercially and made available to other units on hire.

Support (up to 50% of expenditure) for developing a common brand, packaging and retail tie-ups around an ODOP product. Only groups — FPOs, SHGs, cooperatives or an SPV — can apply, not individuals, and the product needs a minimum turnover of ₹5 crore to qualify. It does not cover opening retail outlets.

A District Resource Person appointed by the State Nodal Agency identifies or verifies your unit, does due diligence, and helps you prepare a Detailed Project Report (DPR). The District Level Committee reviews it, then it goes to a bank for the loan; once the bank sanctions the loan, the subsidy is released against it. You can also register directly on the PM-FME MIS portal.

Yes — a 2% interest subvention on the outstanding loan balance under the Interest Subvention Scheme for incremental credit to MSMEs, 2018, on top of the 35% capital subsidy. Loans are also eligible for collateral-free credit-guarantee coverage under CGTMSE.

As of 30 June 2025 (the latest official figures), 1,44,517 credit-linked loans worth ₹11,501.79 crore had been sanctioned, seed capital worth ₹1,182.48 crore had been approved for 3,48,907 SHG members, and 1,16,666 beneficiaries had been trained under the scheme, against a target of 2 lakh directly assisted units.

Contact the Ministry of Food Processing Industries at 011-2640 6500 or [email protected], or reach out through your District Resource Person or State Nodal Agency for scheme-specific help.