There are some schemes of the Narendra Modi government, in which the beneficiaries also get credit cards. One such scheme is for small businesses or micro enterprises. Under this scheme, the government is providing credit cards. The limit of this card is up to Rs 5 lakh. The government has designed this scheme in such a way that small businessmen can easily get working capital or required capital and digital transactions are encouraged.
What needs to be done for this?
To take the benefits of the Micro Credit Card Scheme (ME-Card), micro enterprises have to be registered on the Central Government’s ‘Udhyam Portal’. However, the final decision to issue the card and set the credit limit will be based on the credit check and policies of the concerned bank or lending institution. Each credit card comes with a pre-approved revolving credit limit of up to Rs 5 lakh. There is no origination fee for initial applicants. The annual fee is capped at a maximum of 1% of the card limit or Rs 1,000 (whichever is lower). UPI, Account Aggregator Framework and a simple Common Digital Application Form are being used for quick approval without much paperwork. The interest rate is fixed as per RBI guidelines and the annual percentage rate of interest is very competitive.
What will this card be used for?
This facility can be used by traders for their working capital needs. Such as buying raw materials for a shop or unit, increasing stock, incurring day-to-day business expenses or meeting temporary cash shortages in the business. It is different from a regular term loan. In revolving credit, the businessperson can use the money as per their requirement within the sanctioned limit and can use the available credit again after repayment.
It is to be noted that Finance Minister Nirmala Sitharaman had announced this in the Union Budget 2025-26 presented on February 1, 2025. At that time, she had announced that customized credit cards with a limit of up to Rs 5 lakh would be issued to micro enterprises registered on the Udyog portal. The target was to issue 10 lakh such cards in the first year.
The government has also made major changes in the definition of MSME. The investment limit for micro enterprises has been increased from Rs 1 crore to Rs 2.5 crore and the turnover limit has been increased from Rs 5 crore to Rs 10 crore. For small enterprises, the limits are Rs 25 crore and Rs 100 crore, respectively, while for medium enterprises, they are Rs 125 crore and Rs 500 crore.
