Micro Credit Card Scheme for Micro Enterprises

Scheme Introduction: A Brief Overview

Small businesses often need regular funds to purchase raw materials, pay suppliers, maintain stock and manage other day-to-day expenses. However, getting timely working capital from banks can be difficult for micro enterprises, particularly those with limited assets or a short credit history. To improve their access to formal credit, the Government of India introduced the Micro Credit Card Scheme for Micro Enterprises. Under this scheme, eligible enterprises registered on the Udyam portal can access revolving credit of up to ₹5 lakh through a customised business credit card. The facility carries 75% credit guarantee coverage and does not require mandatory primary security, as announced by the government.

The scheme was announced in the Union Budget 2025–26 on 1 February 2025 and formally launched on 25 May 2026 by Union Finance Minister Nirmala Sitharaman during SIDBI's 37th Foundation Day celebrations in Mumbai. The Department of Financial Services (DFS), under the Ministry of Finance, Government of India, is responsible for its implementation. The Budget announcement initially set a target of issuing 10 lakh customised credit cards in the first year. The scheme is intended to make working capital more accessible to small businesses through the formal banking system.

The credit card provides a revolving credit facility, which means that a business can use the available credit, repay the amount used and access the available limit again, subject to the card's terms. The funds are meant for genuine business requirements, such as purchasing raw materials, paying suppliers and meeting other working capital expenses. The card is not intended for personal spending. The government-backed guarantee covers 75% of the amount in default or the credit card limit, whichever is lower, according to Canara Bank's published product terms. This guarantee arrangement helps participating lenders manage their lending risk.

The scheme is intended for micro enterprises registered on the Udyam portal. Under the revised MSME classification effective from 1 April 2025, a micro enterprise must have an investment in plant and machinery or equipment of up to ₹2.5 crore and an annual turnover of up to ₹10 crore. Both manufacturing and service-sector businesses can fall within this classification. However, Udyam registration alone does not guarantee approval. Each participating bank may apply its own credit assessment, account-history and repayment-capacity requirements before issuing a card.

Business owners can enquire about the Micro Credit Card facility at their bank branch. SBI also lists the JanSamarth portal as an application route. Applicants should check the process and availability with their chosen bank, keep their Udyam Registration Certificate and KYC details ready, and submit any additional documents requested by the lender. The maximum credit limit is ₹5 lakh, but the actual amount sanctioned depends on the bank's assessment. Interest rates, repayment conditions and applicable charges should also be confirmed with the issuing bank before accepting the card.

For further information, applicants can contact their chosen bank or refer to the Department of Financial Services. They may also explore other business finance options covered on GovtSchemes.in, such as the Pradhan Mantri MUDRA Yojana (PMMY), which provides loans for eligible income-generating micro businesses, and the Prime Minister's Employment Generation Programme (PMEGP), which supports the establishment of new micro enterprises through a credit-linked subsidy.

Scheme Benefits

The Micro Credit Card Scheme for Micro Enterprises helps small business owners meet their regular working capital needs through a customised RuPay business credit card. It offers the following benefits:

• Eligible Udyam-registered micro enterprises can access a customised RuPay business credit card with a revolving credit limit of up to ₹5 lakh, subject to the bank's assessment.
• The revolving credit facility allows businesses to use the available amount, repay the amount used and access the available credit again, as per the card's terms.
• Business owners can use the card for working capital requirements, such as purchasing raw materials, paying suppliers and meeting other eligible business expenses.
• The facility does not require mandatory primary security, making formal working capital credit more accessible to eligible micro enterprises.
• The credit facility is supported by 75% guarantee coverage under CGTMSE, helping participating banks manage the risk of lending to micro enterprises.
• The joining fee is waived for the first 10 lakh customers, with government reimbursement of up to ₹500 per RuPay card.
• The RuPay card supports digital business payments, including UPI payments where enabled by the issuing bank.
• Businesses can use the approved credit limit for recurring working capital needs instead of applying for a fresh loan for every transaction, subject to repayment and card conditions.

Credit Limit, Interest Rate and Other Charges

The Micro Credit Card Scheme for Micro Enterprises offers a revolving credit facility of up to ₹5 lakh. However, the minimum credit limit, interest-free period and other charges may differ between banks. The final limit is decided after the bank checks the enterprise's business details and repayment capacity.

Credit Limit

• The maximum credit limit under the scheme is ₹5 lakh per card.
• State Bank of India (SBI) offers a minimum limit of ₹50,000 and a maximum of ₹5 lakh.
• Indian Bank offers a minimum limit of ₹10,000 and a maximum of ₹5 lakh.
• Canara Bank assesses the eligible limit using factors such as the applicant's request, existing working capital limit and business turnover. The maximum is ₹5 lakh.

Interest Rate and Interest-Free Period

• SBI provides an interest-free period of up to 50 days, depending on the transaction date and payment due date.
• Canara Bank states that the Annual Percentage Rate (APR) after the free credit period will not exceed 18% where credit guarantee coverage is available for the portfolio.
• Interest and late payment charges are applied according to the issuing bank's terms and applicable RBI directions.

Joining Fee, Annual Fee and Guarantee Fee

• There is no joining fee for the first 10 lakh customers across financial institutions. The Government of India reimburses up to ₹500 per RuPay card.
• According to Canara Bank, the annual fee in subsequent years is capped at 1% of the card limit or ₹1,000, whichever is lower.
• Canara Bank lists a CGTMSE guarantee fee of 0.55% of the credit card limit, payable by the customer. It also states that no risk premium is charged.

These charges and repayment terms are based on the published product information of the respective banks. They should not be treated as identical across all lenders. Before accepting a card, applicants should ask their bank for the applicable interest rate, free credit period, annual fee, guarantee fee and other charges.

How Does the Credit Guarantee Work?

One of the important features of the Micro Credit Card Scheme for Micro Enterprises is its credit guarantee support through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This arrangement helps participating banks provide working capital credit to eligible micro enterprises by reducing part of the lender's risk if the borrower defaults.

Under the published scheme terms, the guarantee coverage is 75% of the amount in default or the credit card limit, whichever is lower. Canara Bank also states that the guarantee must be obtained before the card is activated.

How the Guarantee Benefits Micro Enterprises

• It gives banks additional protection against a portion of the potential loss if an eligible borrower defaults.
• It encourages participating lenders to extend formal working capital credit to eligible micro enterprises.
• It supports access to credit without mandatory primary security under the scheme.
• It helps small businesses access a formal credit facility through a RuPay business credit card.

The guarantee is provided to the lending institution; it is not a grant or direct payment to the business owner. The borrower remains responsible for repaying the amount used, along with applicable interest and charges. The guarantee does not cancel the borrower's repayment obligation.

Eligibility Requirements

The Micro Credit Card Scheme for Micro Enterprises is intended for small businesses that fall under the micro-enterprise category and are registered on the Udyam portal. Applicants must meet the basic enterprise classification requirements and the lending conditions of the bank from which they seek the credit card.

• The enterprise must be registered on the Udyam Registration Portal.
• Its Udyam registration must show that it is classified as a micro enterprise.
• Under the revised MSME classification effective from 1 April 2025, the enterprise must have an investment in plant and machinery or equipment of up to ₹2.5 crore.
• The enterprise's annual turnover must not exceed ₹10 crore.
• The applicant must provide the Udyam registration details and the identity, business and financial documents requested by the participating bank.
• The applicant must satisfy the issuing bank's credit assessment and verification requirements.
• The bank may consider factors such as the applicant's credit history, existing loan repayment record, account conduct and repayment capacity before approving the card.

Udyam registration and meeting the micro-enterprise classification limits do not guarantee approval. Banks may have different eligibility conditions. For example, some banks may accept new customers, while others may offer the facility only to existing borrowers or customers with an established banking relationship. Applicants should therefore check the conditions of their chosen bank before applying.

Required Documents

Before applying for the Micro Credit Card Scheme for Micro Enterprises, applicants should keep their business registration, identity and financial details ready. Depending on the business structure and its lending requirements, the participating bank may ask for the following documents:

• Udyam Registration Certificate showing the enterprise's micro classification.
• PAN card of the business or proprietor, as applicable.
• Aadhaar card or another valid identity proof of the applicant.
• Business address proof, such as a utility bill or another document accepted by the bank.
• Recent bank account statements of the business.
• Business details, including the nature of activities and operating address.
• GST registration certificate and relevant GST returns, if applicable.
• Income Tax Returns or financial statements, if requested by the bank.
• Any additional documents required by the bank for verification and credit assessment.

The document requirements may differ between banks and depend on the applicant's business structure and financial profile. It is advisable to check the document checklist with the chosen bank before submitting the application.

Steps to Apply

Micro enterprise owners can apply for the Micro Credit Card Scheme for Micro Enterprises by contacting a participating bank. SBI also mentions the JanSamarth Portal as an application route. The bank will guide applicants through its application process and explain the documents required for credit assessment. Follow these steps to get started:

1. Make sure your business has a valid Udyam Registration Certificate showing its micro enterprise classification.
2. Contact your existing bank branch and ask whether it offers the Micro Credit Card facility. You can also check the JanSamarth Portal for the available application facility.
3. Ask the bank for its application form and document checklist. The application process may differ between participating banks.
4. Provide your Udyam registration details, PAN, identity proof, bank statements and other business documents requested by the bank.
5. Submit the completed application and supporting documents to the bank or through the application channel it provides.
6. The bank will verify your business information and assess your credit profile and repayment capacity.
7. If your application is approved, the bank will inform you of the sanctioned credit limit and applicable interest, repayment and card charges before issuing the RuPay business credit card.

The application and approval process may vary depending on the issuing bank. Applicants should confirm the available facility, eligibility conditions and applicable charges directly with their chosen bank.

The maximum credit limit under the scheme is ₹5 lakh. However, receiving the maximum amount is not guaranteed. The final credit limit depends on the bank's assessment of the applicant's business and financial position.

Rules for Using the Micro Credit Card

The Micro Credit Card is designed specifically to meet business-related working capital requirements. Cardholders must follow the issuing bank's usage and repayment conditions to continue using the facility. Important rules include:

• Business expenses only: The card must be used for genuine business expenses, such as purchasing raw materials, paying suppliers and meeting other working capital requirements.
• No personal spending: Personal or non-business transactions are not eligible under the facility.
• One card per enterprise: The scheme provides one standalone business credit card per micro enterprise, according to the published bank terms.
• Repayment within the due date: Cardholders should repay the amount used by the payment due date shown on their statement to avoid applicable interest and late payment charges.
• Interest-free period: The interest-free period depends on the issuing bank and the date of the transaction. For example, SBI offers up to 50 days under its published terms.
• Revolving credit facility: After repaying the amount used, the available credit can be used again, subject to the approved limit and the bank's terms.
• Follow bank-specific conditions: Cardholders must follow the applicable terms for billing, repayment, charges and card usage communicated by their issuing bank.

Using the card responsibly and making timely repayments can help a business manage its working capital more effectively. Cardholders should read the bank's Most Important Terms and Conditions (MITC) before using the card.

Relevant Links

• Department of Financial Services, Ministry of Finance
• Micro Credit Card Scheme for Micro Enterprises – Launch Announcement
• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• JanSamarth – National Portal for Credit-Linked Government Schemes
• Lok Sabha Reply – Credit Card for Micro Enterprises

Contact Information

Credit Card for Micro Enterprises (CCME)

• For assistance, call 1800 222 659 or 022-6722 1553 (10 AM–6 PM).

Department of Financial Services, Ministry of Finance, Government of India

• Phone: 011-23347571 (Industrial Finance Section)
• Email: [email protected]
• Address: Department of Financial Services, Ministry of Finance, Jeevan Deep Building, Sansad Marg, New Delhi – 110001
• Contact Directory: Department of Financial Services – Official Directory

For application, eligibility or credit card-related queries, applicants should contact their chosen participating bank. The Department of Financial Services contact details above are for its Industrial Finance section and should not be treated as a dedicated scheme helpline.