New Delhi, July 21 -- In a bid to ease working capital constraints faced by micro enterprises, the government is preparing a new scheme that will enable banks to issue credit cards with a limit of up to Rs 5 lakh.

The cards, to be extended exclusively to units registered on the Udyam portal, will come with credit guarantee coverage-a first for such a financial product-aimed at reducing borrowing costs and risk for lenders.

This initiative follows several MSME-focused measures announced in the Union Budget 2025-26, which include enhanced credit guarantee cover, relaxed classification thresholds, and targeted support for first-time entrepreneurs from underrepresented backgrounds.

Designed to address the immediate cash flow challenges of ...