MSME Credit Card: Higher Limit & More Benefits in Budget 2025-26

The Government of India has always focused on MSMEs and brought various schemes and policies to empower the MSME sector as well as taking financial and regulatory measures because MSMEs act as a second engine of the Indian economy. In the Union Budget 2025-26, the government took a major step to strengthen MSMEs sector by announcing the MSME Credit Card Scheme. The scheme aims to increase the loan limit and provide additional benefits to small business owners. This step has been taken so that the financial barriers of all the MSMEs located in India can be removed and economic growth can get a boost.

Through this blog, we will learn about the MSME credit limit and changes that have been shown in the credit limit, benefits available under the MSME credit card scheme, etc

What is the meaning of an MSME credit card?

MSME credit cards have been designed as a financial tool due to which MSMEs who have registered their business under the Udyam Registration System can easily get access to credit. This card helps small businesses by providing them working capital, expansion of their businesses, or any other financial need.

As announced in the latest budget, the credit limit has been increased, and new benefits have also been introduced, making it an essential financial instrument for entrepreneurs.

Higher Credit Limit for MSMEs

The biggest major change in the MSME Credit Card Scheme has been made in Budget 2025-26 by enhancing the credit limit. Earlier, MSMEs used to get limited funds, due to which their business capacity was often hindered. However, now the credit limit has been revised, due to which eligible businesses will be able to take higher credit limits based on their turnover, business time and repayment history.

Main changes in credit card limit

• Maximum limit increased: Earlier, the credit ceiling was Rs 10 lakh, which has been increased to Rs 25 lakh for Udyam-registered eligible MSMEs.
• Repayment options made flexible: Businesses can now choose more extended payment periods with lower interest rates
• Collateral-free loans: Many MSMEs will now benefit from collateral-free loans under this new initiative

More benefits under the credit card scheme

Apart from increasing the credit limit, the government has also introduced several additional parts that will make MSME credit cards even more beneficial for businesses. Some of these are

Reducing interest rates

Under this scheme, subsidized interest rates are available, making borrowing more affordable for MSMEs.

Simplifying the application process

Entrepreneurs can apply for a credit card from the government after getting their business registered in Udyam registration portal and can also avail of its benefits. In this, the documentation requirement becomes very minimal.

Digital integration gets enhanced

Credit cards can be linked to various digital payment platforms, due to which the transaction will become completely seamless.

Availability of advisory services and dedicated support

MSMEs will be able to get financial advisory services, due to which they will be able to manage credit efficiently.

Special incentives for women and startups

To promote financial inclusion, the government has introduced special incentives for women entrepreneurs and new startups. Due to this, in this competitive era, if they start a new business, then they will be able to establish their business well.

Eligibility for MSME Credit Card Scheme

To apply for an MSME Credit Card, the business must fulfill the eligibility criteria given below.

• They must have a valid Udyam Registration Certificate.
• Their business must fall under the classification criteria of MSME as per the guidelines issued by the Government.
• Their business must have a good credit history with financial institutions.

How to apply for an MSME credit card

The application process of the MSME credit card has been simplified further, which ensures quick access to financial assistance. Below is some information to apply for an MSME credit card:

• Complete MSME registration: If you have not registered your MSME yet, then complete the MSME registration quickly on the official portal.
• Fill the Udyam registration form: Go to the official Udyam registration portal and fill the Udyam registration form correctly and submit it, after that download your Udyam registration certificate.
• By submitting an online application: Go to the official website of the bank and apply for an MSME credit card from there. While applying, do not forget to attach the necessary documents, like the Udyam certificate download PDF.
• Verification process: The bank will verify your business details and the creditworthiness of your business
• Approval and issuance: Once all the details are verified and approved, you will receive your MSME credit card with updated benefits.

Why MSMEs should use credit cards

Credit cards have proven to be a game changer for MSMEs, as MSMEs always face finance issues. So, for small businesses that are looking for financial flexibility, a credit card is very useful. Here are some reasons why MSMEs should take advantage of this opportunity:

• Immediate access to funds: This helps in managing the operations and also solves the cash crunch that may arise in the business.
• Boosts business growth: Credit cards help expand business even more.
• Tax benefits: Interest paid in credit can be claimed in business expenses
• Government-backed security: Assurance of financial support is available under government schemes.