Madhya Pradesh Startup Policy 2022: Margin Money & Interest Subsidy Scheme

The Madhya Pradesh Startup Policy 2022 includes a Margin Money & Interest Subsidy Scheme to support new businesses. The Department of MSME, Government of Madhya Pradesh, administers the initiative. This department works to create a supportive climate for industry, encourage innovation, and generate jobs for micro, small, and medium enterprises. The policy seeks to build a strong startup environment by offering financial assistance to new ventures.

Eligible startups receive help with two major costs: the initial capital requirement and the expense of borrowing. The scheme provides margin money of up to 15% of the sanctioned term loan, subject to a maximum of ₹12,00,000 (₹12 Lakh). This reduces the upfront equity a startup must arrange. In addition, the scheme offers an annual interest subsidy of 5% on term loans from scheduled banks or other approved financial institutions. This subsidy is limited to ₹5,00,000 (₹5 Lakh) per year and is available for up to seven years, which lowers the long-term cost of debt.

The funds support business operations and setup expenses that a standard term loan would normally cover. Startups can use the capital for asset acquisition, infrastructure development, or operational costs related to growth. To encourage wider participation, the scheme provides a higher interest subsidy of 6% for startups majority-owned by founders from Scheduled Caste (SC), Scheduled Tribe (ST), Other Backward Classes (OBC) categories, or by women entrepreneurs. This provision aims to support underrepresented groups in the entrepreneurial space.

Applicants must begin by registering on the MP Startup portal, which acts as the single entry point for all state-level startup initiatives. The portal is designed to facilitate straightforward submission of applications.

The next step is to attach the DPIIT recognition certificate, which confirms the enterprise’s startup status, alongside the loan sanction letter from the financial institution. The sanction letter must specify the approved term loan amount.

A detailed repayment schedule for the loan, issued by the bank or financial institution, is also required. This schedule is essential for determining the annual interest subsidy and verifying the amount payable.

For those seeking enhanced benefits, supporting documents must be provided, such as a category certificate (SC, ST, or OBC) or proof that the enterprise is majority women-owned.

Finally, accurate bank particulars, including the account number and IFSC code, must be furnished. These details enable the direct and prompt transfer of approved margin money and interest subsidies.

Applications begin on the MP Startup portal, where applicants submit proof of their loan, interest payments, and DPIIT registration. Each submission is checked against the lending conditions set out in the Madhya Pradesh Startup Policy 2022. Startups that pass this review are granted margin money support and an interest subsidy on eligible loans.