Government Calls For Increased Issuance Of ME-Cards To Support Micro Enterprises

The Indian government has urged banks to increase their issuance of Micro Enterprise Cards (ME-Cards) this year. The aim is to ensure that all eligible micro units can quickly access working capital credit. Initially, the target was set at one million ME-Cards for this fiscal year. However, the government now wants banks to double this number, according to sources familiar with the situation.

Banks are currently evaluating eligible borrowers as part of a model scheme for micro credit cards that has already been finalised. Announced in the FY26 budget, the ME-Card scheme is designed to provide easy access to working capital credit for micro, small, and medium enterprises (MSMEs) registered on the Udyam portal. Each card offers a credit limit of ₹5 lakh.

Government's Vision for ME-Cards

The government anticipates that this initiative will lead to an additional credit disbursement of ₹25,000-30,000 crore for the MSME sector. A senior bank executive mentioned that after receiving instructions from the government to expedite the process, it was decided to standardise features and eligibility criteria across all banks. "We are also working on a common application form for MSME loans to bring uniformity," said the executive.

With proper assessment models in place, banks are expected to reach at least 20 million customers. The credit card facility will be based on a simpler assessment model using enterprise revenues captured through digital processes like UPI and bank statements, as well as the Account Aggregator (AA) framework.

Digital Process and Benefits

The entire process from approval to loan disbursal will be conducted digitally. This approach aims to provide Udyam-registered MSMEs with easy and fast access to credit without needing detailed financial statements or collateral. "This will enable smaller micro enterprises with quick and easy access to funds," stated a government source.

The ME-Card scheme offers a revolving account facility valid for up to one year and renewable upon satisfactory performance of the firm. Borrowers can benefit from this scheme even if they have already used another credit facility under a different guarantee scheme, provided they meet other eligibility criteria.