Budget 2025: ME-Card announced for credit access to MSMEs; key features

To facilitate credit accessibility, Union Finance Minister Nirmala Sitharaman introduced a customised credit card scheme for micro enterprises registered on the Udyam portal

Union Finance Minister Nirmala Sitharaman, while presenting the 2025-26 Budget on February 1, announced significant reforms aimed at strengthening Micro, Small, and Medium Enterprises (MSMEs) and start-ups. To facilitate credit accessibility, the finance minister introduced a customised credit card scheme for micro enterprises (ME-Card) registered on the Udyam portal.

 

Each card will have a Rs 5 lakh limit, with 1 million cards set to be issued in the first year. Additionally, the credit guarantee cover for micro and small enterprises will be doubled from Rs 5 crore to Rs 10 crore, unlocking an estimated Rs 1.5 trillion in additional credit over five years. Export-oriented MSMEs will also benefit from term loans of up to Rs 20 crore.

 

Regarding the processing fee for the sanctioning of credit facilities under the ME-Card Scheme, it is proposed that banks may charge processing fees in accordance with their internal lending policies.

 

Meanwhile, the finance minister he also announced that the investment and turnover thresholds for MSME classification would be increased to 2.5 and 2 times, respectively, to enhance scalability, technological advancements, and access to capital.  

 

For smaller entrepreneurs, 6.8 million street vendors under the PM SVANidhi scheme will receive improved banking support, including higher bank loan limits and UPI-linked credit cards with a Rs 30,000 cap.  

 

Budget 2025: Boost for start-ups

 

To support entrepreneurship, a new Fund of Funds will be launched with an initial investment of Rs 10,000 crore, expanding on existing alternative investment funds (AIFs), which have already secured commitments of Rs 91,000 crore.    Amarjit Makhija, Partner and Leader, Startups, PwC India, said, "The Union Budget’s increased allocation to a new Fund of Funds and the extension of startup benefits until 2030 provide much-needed long-term visibility for both startups and investors. With Indian startups historically grappling with a robust domestic funding ecosystem, these measures will offer stronger financial backing and stability. Additionally, the enhanced Rs 20 crore limit under the credit guarantee scheme will expand access to domestic debt, encouraging more banks to allocate funding for startups, ultimately strengthening India’s entrepreneurial landscape." 

 

A special initiative will provide term loans of up to Rs 2 crore for 500,000 women, Scheduled Caste (SC), and Scheduled Tribe (ST) entrepreneurs over five years, alongside online capacity-building programmes.  

 

Budget 2025: Manufacturing initiatives

 

The government will introduce a dedicated scheme for the footwear and leather industries while also implementing measures to establish India as a global toy manufacturing centre. Furthermore, a National Manufacturing Mission will be set up to support small, medium, and large industries, reinforcing the ‘Make in India’ initiative through policy support, governance frameworks, and execution roadmaps.  

 

Presenting her eighth consecutive Budget, Sitharaman said the document prioritises the needs of the poor, youth, farmers, and women. Notably, India currently has over 10 million registered MSMEs, employing 75 million individuals and contributing 36 per cent to the manufacturing sector. These enterprises account for 45 per cent of the country’s exports.  Vinod Kumar, Partner and Leader Manufacturing, PwC India, said, "The Budget clearly recognises the critical role that the Manufacturing Sector plays in the journey towards Viksit Bharat.  The budget brings significant boosts to the sector, focusing on self-reliance and global competitiveness. The National Manufacturing Mission and expanded PLI scheme (Rs 25,000 crore) for electronics will enhance local production. The Semicon India Programme is set to attract Rs 1.52 trillion in investments and generate 85,000 jobs. A Rs 250 billion Maritime Development Fund supports shipbuilding. Customs duty exemptions on smartphone components and critical minerals will reduce costs and improve supply chains. Enhanced credit availability for India’s vast MSME segment is essential to become competitive globally."    Investment and Turnover for Enterprises  

Type of enterprise	Investment		Turnover
	Current	Revised	Current	Revised
Micro Enterprises	Rs 1 crore	Rs 2.5 crore	Rs 5 crore	Rs 10 crore
Small Enterprises	Rs 10 crore	Rs 25 crore	Rs 50 crore	100 crore
Medium Enterprises	Rs 50 crore	Rs 125 crore	Rs 250 crore	500 crore