The government is likely to launch a low-cost credit card scheme for micro businesses later this month.
The aim is simple—reduce borrowing costs and help small businesses manage their daily expenses more easily.
Under this scheme, micro enterprises—especially those registered on the Udyam portal—may get unsecured credit cards with a limit of up to Rs 5 lakh.
Lower Interest Rates, Bigger Relief
One of the biggest benefits of this scheme is cheaper interest rates.
Regular credit cards often charge 36–42% interest on outstanding amounts.
But under this new plan, rates could be around 18% or even lower.
There may also be:
A 30-day interest-free period
Flexible repayment options
This means businesses can borrow money at much lower cost and repay it more comfortably.
Govt Support to Encourage Banks
To make the scheme successful, the government plans to support banks.
Banks may receive up to Rs 500 per card as a one-time incentive for issuing the first 10 lakh cards.
The scheme is also expected to be backed by credit guarantee programs like Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which reduces risk for lenders.
This support will encourage banks to offer loans at lower interest rates.
Big Boost for MSMEs and Economy
This initiative could unlock Rs 25,000 crore to Rs 50,000 crore in additional credit every year.
That’s a big boost for the MSME sector, which plays a key role in jobs and economic growth.
Many small businesses struggle with delayed payments—sometimes up to 90 days.
This creates cash flow problems and affects daily operations like paying salaries or buying inventory.
This scheme aims to solve exactly that problem.
Convert Dues into Easy EMIs
Another helpful feature is the option to convert outstanding dues into EMIs (monthly payments).
These EMIs could come at even lower interest rates—around 10–12%.
This makes repayment easier and reduces financial pressure on small business owners.
Who Will Benefit First?
The scheme will mainly target small borrowers, including those already using government schemes like Mudra loans.
Initially, banks are likely to offer these cards to existing customers with a credit history.
For many businesses, this means access to extra funds up to Rs 5 lakh to manage short-term needs.
A Step Towards Easier Business Financing
Overall, this scheme could make borrowing cheaper, faster, and more accessible for small businesses.
If launched as expected, it may become a key tool to support micro enterprises and strengthen India’s economic backbone.
