Customized credit cards with ₹5 lakh limit for micro enterprises: FM Nirmala Sitharaman

Union Minister Nirmala Sitharaman announces major MSME sector reforms in Union Budget 2025, including credit enhancements and new funds.

Union Minister Nirmala Sitharaman on Saturday (February 1, 2025) said the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively, to achieve higher efficiencies of scale, technological upgradation and better access to capital.

Also read:Union Budget 2025 LIVE updates

Presenting the Budget for 2025-26, the Finance Minster said currently, there are over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36% of our manufacturing. These MSMEs have positioned India as a global manufacturing hub, with 45% of our exports coming from them.

The Finance Minister also announced the introduction of the customized credit cards with a ₹5 lakh limit for micro enterprises registered on Udyam portal. In the first year, 10 lakh such cards will be issued, she said.

“For Micro and Small Enterprises, the credit guarantee cover will be enhanced from ₹5 crore to ₹10 crore, leading to additional credit of ₹1.5 lakh crore in the next 5 years,” she added. She said for well-run exporter MSMEs, term loans would be provided up to ₹20 crore.

The Finance Minister announced a Fund of Funds for Startups to promote entreprenuership in the budget.

To improve access to credit, the credit guarantee cover will be enhanced, which will also include start-ups, Ms. Sitharaman noted.