ME-Card: The government led by Narendra Modi offers various schemes that include providing beneficiaries with a credit card, such as one tailored for micro enterprises. This particular scheme offers credit cards with a maximum limit of Rs 5 lakh, aiming to enhance small businesses’ access to working capital and boost digital transactions.
To participate in the Micro Credit Card Scheme (ME-Card), micro enterprises need to register on the central government’s Udyam portal. However, the decision on card issuance and credit limit is subject to the bank or lender’s credit assessment and policies. Each credit card features a pre-approved revolving credit limit of up to Rs 5 lakh, with no initial joining fee and an annual fee capped at 1% of the card limit or Rs 1,000, whichever is lower. Utilizing UPI, an account aggregator framework, and a simplified digital application form speeds up approval with minimal paperwork. Interest rates are competitive and follow RBI guidelines.
The card is intended for businesses to fulfill their working capital requirements, like buying raw materials, increasing inventory, managing daily expenses, or addressing temporary cash flow challenges, unlike a conventional term loan. Revolving credit enables businesses to utilize funds within an approved limit as necessary, with the flexibility to reuse the available credit after repayment.
In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman announced the issuance of customized credit cards with a Rs 5 lakh limit to micro enterprises registered on the Udyam portal, aiming to distribute 1 million cards in the first year. Moreover, significant changes have been made to the definition of MSMEs, including raising the investment limit for micro enterprises from Rs 1 crore to Rs 2.5 crore and the turnover limit from Rs 5 crore to Rs 10 crore. Similarly, the limits have been increased to Rs 25 crore and Rs 100 crore for small enterprises, and Rs 125 crore and Rs 500 crore for medium enterprises.