diff --git a/.changeset/heavy-trainers-fly.md b/.changeset/heavy-trainers-fly.md
new file mode 100644
index 0000000000..48560b7ddd
--- /dev/null
+++ b/.changeset/heavy-trainers-fly.md
@@ -0,0 +1,5 @@
+---
+'@backstage/backend-common': patch
+---
+
+Added config prop `ensureSchemaExists` to support postgres instances where user can create schemas but not databases.
diff --git a/packages/backend-common/config.d.ts b/packages/backend-common/config.d.ts
index 700d9a6c6c..c6263cde97 100644
--- a/packages/backend-common/config.d.ts
+++ b/packages/backend-common/config.d.ts
@@ -111,6 +111,13 @@ export interface Config {
        * Defaults to true if unspecified.
        */
       ensureExists?: boolean;
+      /**
+       * Whether to ensure the given database schema exists by creating it if it does not.
+       * Defaults to false if unspecified.
+       *
+       * NOTE: Currently only supported by the `pg` client when pluginDivisionMode: schema
+       */
+      ensureSchemaExists?: boolean;
       /**
        * How plugins databases are managed/divided in the provided database instance.
        *
@@ -147,6 +154,13 @@ export interface Config {
            * Defaults to base config if unspecified.
            */
           ensureExists?: boolean;
+          /**
+           * Whether to ensure the given database schema exists by creating it if it does not.
+           * Defaults to false if unspecified.
+           *
+           * NOTE: Currently only supported by the `pg` client when pluginDivisionMode: schema
+           */
+          ensureSchemaExists?: boolean;
           /**
            * Arbitrary config object to pass to knex when initializing
            * (https://knexjs.org/#Installation-client). Most notable is the
diff --git a/packages/backend-common/src/database/connectors/postgres.ts b/packages/backend-common/src/database/connectors/postgres.ts
index 1ddc096e05..b81bfd5b50 100644
--- a/packages/backend-common/src/database/connectors/postgres.ts
+++ b/packages/backend-common/src/database/connectors/postgres.ts
@@ -321,7 +321,10 @@ export class PgConnector implements Connector {
     let schemaOverrides;
     if (this.getPluginDivisionModeConfig() === 'schema') {
       schemaOverrides = this.getSchemaOverrides(pluginId);
-      if (this.getEnsureExistsConfig(pluginId)) {
+      if (
+        this.getEnsureSchemaExistsConfig(pluginId) ||
+        this.getEnsureExistsConfig(pluginId)
+      ) {
         try {
           await pgConnector.ensureSchemaExists!(pluginConfig, pluginId);
         } catch (error) {
@@ -437,6 +440,16 @@ export class PgConnector implements Connector {
     );
   }
 
+  private getEnsureSchemaExistsConfig(pluginId: string): boolean {
+    const baseConfig =
+      this.config.getOptionalBoolean('ensureSchemaExists') ?? false;
+    return (
+      this.config.getOptionalBoolean(
+        `${pluginPath(pluginId)}.getEnsureSchemaExistsConfig`,
+      ) ?? baseConfig
+    );
+  }
+
   private getPluginDivisionModeConfig(): string {
     return this.config.getOptionalString('pluginDivisionMode') ?? 'database';
   }