If you run a small or micro business and often face the problem of working capital due to delays in receiving payment, then there is some big news for you. The central government is soon working on a plan to bring a special low-interest credit card for MSMEs, i.e., micro, small, and medium enterprises. The purpose of this step is to provide timely capital to small businessmen, so that there is no hindrance in their work.
Big relief for micro enterprises
Nowadays, many small businesses take 60 to 90 days to get payment from customers. At the same time, the interest-free period in a normal credit card is only 30-45 days, after which an annual interest of up to 25-30% is charged. This imbalance creates a lot of difficulty for small businessmen. The proposed MSME credit card will overcome this problem and give businessmen the opportunity to repay the loan with flexibility.
Key points of this special credit card
This credit card has been specially designed keeping in mind the needs of the MSME sector. This will be only for those microenterprises that are registered on the Udyam portal. The maximum limit of this card will be up to ₹ 5 lakh, and its interest rate will be much lower than that of a normal credit card. The main objective of this scheme is to provide timely capital (working capital) to businessmen.
Banks will get security from the government guarantee
The most important thing about this scheme is that it will provide security to the banks on loans. Government credit guarantee schemes, such as the ‘Credit Guarantee Fund Trust’, will protect banks from the risk of loans. This will ensure that the banks know their money is safe, and they will be able to give loans to MSME businessmen at low rates without hesitation. Although there will be no direct interest subsidy in this, due to the guarantee cover, the banks themselves will give loans at low interest.
Target to launch by September 2025
The central government has set a target to implement this scheme by September 2025. There is a plan to issue 10 lakh cards in the first year, which is expected to provide great relief to lakhs of small businessmen across the country.
Officials believe that, along with this scheme, a financial literacy campaign will also be run so that no businessman gets trapped in unnecessary debt and uses credit responsibly. This strong step will not only help micro enterprises but will also boost employment and production in the country’s economy.