Budget 2025: Credit Boost for MSMEs, Loans for Women and SC/ST Entrepreneurs

Komal Bajpai

Author

Updated: 16-04-2025 at 12:34 PM

The 2025 Union Budget develops MSMEs and novice entrepreneurs through increased access to credit facilities and enhanced investment limits. The efforts of Finance Minister Nirmala Sitharaman include initiatives to create employment opportunities promote female entrepreneurship and benefit SC/ST business owners. As part of its strategy, the government will use increased credit guarantee coverage and purpose-specific loan schemes to achieve economic growth while making India a leading global manufacturing location and increasing its self-reliance.

Also Read: Boosting MSMEs: Get ₹20 Lakh Via Mudra Loans Initiative

Budget 2025: Key Announcements For MSMEs And Entrepreneurs

The Union Budget of 2025 offers substantial financial backing to MSMEs and entrepreneurs who intend to drive industrial progression while fostering employment opportunities. The government envisions improved productivity and competitive standing in small business operations through their updated investment threshold and better credit facilities. The principal features of this current budget for MSMEs and first-time entrepreneurs can be observed below.

Enhanced Credit Support For MSMEs

The government updated investment and turnover restrictions to give MSMEs greater capacity for scaling their operations.

category	Previous Limit	New Limit
Investment Cap	1x	2.5x
Turnover Limi	1x	2.5x

The maximum guarantee coverage accessible to micro and small businesses has increased from ₹5 crore to ₹10 crore.
Over the upcoming five-year period business growth will benefit from newly available credit worth ₹1.5 lakh crore.
Startups now benefit from ₹20 crore in increased credit guarantee coverage as part of the ‘Aatmanirbhar Bharat’ programme with a 1% reduced guarantee fee for loans designated in the 27 focus sectors.

Contribution Of MSMEs To The Economy

The economic structure of India depends heavily on MSMEs as Finance Minister Sitharaman stated:

The manufacturing output of India receives 36% of contributions from MSMEs.
The 7.5 crore people find employment through the approximately 1 crore registered MSMEs working in the market.
Foreign exports from India reach 45% of the total volume and establish India as the leading global manufacturing centre.

Also Read: IC Scheme MSME 2025 - Global Potential For International Cooperation MSME

New Credit Card Scheme For Micro Enterprises

The government works to decrease obstacles which stand in the way of getting finance for small businesses through micro-enterprises.

Customers engaged with micro business activities on the Udyam Portal will receive customised credit cards through government sponsorship.
Each card under this scheme will offer a maximum borrowing amount of ₹5 lakh.
A minimum of 10 lakh credit cards will be distributed to small businesses during their initial year to obtain working capital without difficulty.

Loan Support For Women, SC/ST Entrepreneurs

The government aims to foster entrepreneurial activity among women entrepreneurs and socially underprivileged groups.

A term loan programme worth ₹2 crore will be launched for women and first-time entrepreneurs along with people who belong to Scheduled Caste and Scheduled Tribe communities.
The programme pursues two objectives to include marginalised communities within the financial system and help them grow their entrepreneurial activities.

Also Read: Driving Entrepreneurial Growth: MSME’s ESDP Initiative Explained!

Past Budget Reforms Supporting MSMEs

The government has always promoted MSMEs through successive years by implementing various measures to bolster their growth.

Through Budget 2023 the government allocated ₹9,000 crore to the Credit Guarantee Scheme for MSMEs.
During the COVID-19 pandemic, the Emergency Credit Line Guarantee Scheme (ECLGS) helped struggling MSMEs to access funds and save multiple job positions.
Production-Linked Incentive (PLI) Scheme received expansion for MSMEs active within the electronic textile and pharmaceutical sectors to boost their production potential.

Conclusion

Budget 2025 demonstrates how the government backs MSMEs and new business owners by enhancing credit access programmes together with financial resources and different loan options. The government intends to establish India as a globally competitive independent economy through expanded funding opportunities coupled with low-interest financing and expanded inclusive financial services. The implemented measures will push employment while encouraging innovation which together will support sustainable economic growth during the next few years.

Get the latest updates on government schemes and policies with Jaagruk Bharat. Join India's biggest Jaagruk Bharat community. Share your thoughts, questions, and your favourite topics for us to cover.