The investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively, said the Union Minister Nirmala Sitharaman on Saturday February 1, 2025.
Customized Credit Cards For Micro Enterprises
The move is supposed to achieve higher efficiencies of scale, technological upgradation and better access to capital, the finance minister explained.
Presently, there are over 1 crore registered MSMEs, employing 7.5 crore people, and generating 36% of our manufacturing, said the finance minister while presenting the Budget for 2025-26.
These MSMEs have a significant role as they have positioned India as a global manufacturing hub, with 45% of our exports coming from them.
During her recent budget speech, the Finance Minister Nirmala Sitharaman introduced customized credit cards for micro enterprises registered on the Udyam portal.
They have taken this step with the objective of strengthening India’s Micro, Small and Medium Enterprises (MSME) sector. In these cards, they will provide a credit limit of ₹5 lakh each.
The introduction of these cards is to mainly protect the business interests of small business owners by helping them manage a clear separation between personal and business finances.
Key Features of SME Credit Cards
With the help of these SME credit cards, the businesses will have access to funds for managing their day to day operations.
For instance the things like purchasing equipment, goods, and covering other associated business expenses.
In addition to this, these cards help in tracking business expenditures hence making it easier to monitor and regulate spending.
Besides this, several SME credit cards offer rewards, cashback and other perks as some of these cards can provide term loans, repayment flexibilities etc.
It is noteworthy here that using a business credit card responsibly can help SMEs build a strong credit history which can further help them in making it easier to explore other forms of financing in the future.
During the first year of its launch, 10 lakh such cards are going to be distributed.
Notably, some of these cards offer an interest-free period of up to 45-50 days, providing short-term working capital for businesses.
A few of these cards also offer EMI services with competitive interest rates hence will help in building a more inclusive economy.
Besides this they will also be helpful in turning the process of physical lending into digital lending even at the grassroot level.
How To Obtain SME Credit Cards?
So far, there are a lot of banks in India that offer credit cards which are specifically designed for SMEs, such as SBI, HDFC, Axis Bank, Kotak, Standard Chartered, and IndusInd Bank.
The aspirational individuals are advised to reach out to the designated banks and obtain further information with regards to the terms and conditions of the card.
To have this card, the applicants need a good credit score, mostly a credit score of 640 to 699 is often the minimum requirement.
Besides this, the long credit history and no defaults along with regular repayment of earlier availed loans is another important element.
If you are looking for more details then you should consult the customer support system of the concerned bank and refer to their official website.
Please note that the different banks have different terms and conditions as they deal with each credit card applicant’s case on an individual basis.
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