The PSG is described in-game as:

It’s like a tiny M4 that fires in 9mm

You can find the PSG in western San Mateo province, inside San Mateo base. The weapons case is in the armoury in the middle of the base.

This is a large cartel base, and has a large cartel presence. I lucked out and happened to approach from the northern entrance, which I think is by far the easiest. After taking out the guards near the entrance, I used a vehicle to get through the gate and stopped before I got into trouble. Then I got out of the vehicle and worked my way up the inside of the northern perimeter, taking out anybody in my way, but met little resistance in that direction.

The PSG has the usual 20 round standard magazine with a 30 round extended magazine option found in Media Luna.

This is the most accurate SMG you can pick up in the game, and has very low recoil. If you run an SMG in your loadout, I highly recommend this gun.