The introduction of credit cards for micro, small, and medium enterprises (MSMEs) is expected to be a transformational move, providing easy access to finance. However, industry experts believe that the loan disbursal process needs to be streamlined to ensure businesses receive the financial benefits.

The Union Budget 2025 has been well received by the MSME sector for its focus on financial support, digitization, and sector-specific initiatives. One of the most significant announcements is the issuance of 10 lakh credit cards to micro-enterprises, each with a limit of ₹5 lakh. Throughout this article, we will explain in detail how credit cards can be a game changer for small businesses, enabling easy withdrawals and improved financial access.

Benefit for Small Traders

Industry players say this move will enhance financial inclusion and ease liquidity challenges for small businesses. Jyoti Prakash Gadia, managing director of Resurgent India, called the credit card initiative for micro-enterprises registered on the Udyam portal a game changer. He mentioned that financial access remains a challenge for small businesses, and this move will significantly ease their working capital constraints.

How Much Loan is Likely to Be Received in the Next Five Years

Gadia stated that the announcement of 10 lakh credit cards, each with a limit of ₹5 lakh for micro-enterprises, is a big boost for providing much-needed finance to enterprises registered on the Udyam portal. Additionally, the budget has increased the credit guarantee cover for micro-enterprises from ₹5 crore to ₹10 crore. This move is expected to provide an additional credit of ₹1.5 lakh crore over the next five years.

Addressing the Challenges of MSMEs

Despite these positive steps, industry experts say that ensuring timely access to credit remains a challenge. Mukul Goyal, co-founder of Stratafix Consulting, emphasized the need to reduce bureaucratic hurdles in the loan disbursal process.

Goyal pointed out that while these measures are promising, solving the persistent challenges faced by MSMEs is crucial. Access to timely and affordable credit continues to be a barrier for many small businesses.

How Will You Benefit?

It’s important to note that under MSME schemes, micro-entrepreneurs can avail a loan of up to ₹3 lakh. However, from now on, those registered with the Udyam portal will be able to access credit cards with a limit of ₹5 lakh. The government plans to issue 10 lakh such credit cards to eligible businesses.