Context:
In the Union Budget 2025-26, Union Finance Minister Nirmala Sitharaman made several impactful announcements to further strengthen credit availability, MSMEs, Startups, first-time entrepreneurs and enhance exports by way of initiatives in the area.
Key Highlights
Enhancement of Credit Guarantee Cover
- To facilitate easier access to credit, the government has further expanded credit guarantee cover for:
- Micro and Small Enterprises (MSEs): Now increased from ₹5 crore to ₹10 crore, resulting in ₹1.5 lakh crore in additional credit over the next five years.
- Start-ups: Now from ₹10 crores to ₹20 crores, with reduced guarantee fee of 1% on loans in the 27 focus sectors, under Atmanirbhar Bharat.
- Well-Run Exporter MSMEs: Term loan guarantee cover up to ₹20 crore for export-oriented units.
Credit Cards for Micro Enterprises
- New customized credit cards with a limit of ₹5 lakh for micro enterprises registered on the Udyam portal.
- Target: 10 lakh cards in the first year.
Fund of Funds for Startups
- Existing Alternate Investment Funds (AIFs) have received commitments of over ₹91,000 crore, supported by the ₹10,000 crore Fund of Funds.
- New Fund of Funds will be set up with an additional ₹10,000 crore contribution, expanding its scope to support more startups.
Scheme for First-Time Entrepreneurs
A new scheme shall be launched, targeting 5 lakh first time entrepreneurs from women, Scheduled Castes(SCs), Scheduled Tribes (STs), over the course of the five years. Over the next five years, all these shall offer term loans, up to the tune of 2 crores. Inspired in every way through the successful program Stand-Up India, the above scheme shall consist of online training programs for entrepreneurs and managerial practices.
- A Deep Tech Fund of Funds will be explored to catalyze next-generation startups in advanced technologies that will fuel innovation and global competitiveness.
Export Promotion Mission
A dedicated Export Promotion Mission shall be established and jointly driven by the Ministries of Commerce, MSME and Finance.
- The key focus areas are:
- Easier access to export credit.
- Cross-border factoring support.
- Support to MSMEs in overcoming non-tariff barriers faced in international markets.
- The budget introduces bold credit expansion, increased funding for startups, and export promotion initiatives to strengthen India’s MSME and startup ecosystem.
- These measures aim to boost entrepreneurship, facilitate easy credit access, and position India as a global business hub while ensuring inclusive growth for women and marginalized communities.
