New Delhi, July 21 -- The government is contemplating rolling out a scheme under which banks will issue credit cards with a Rs.5 lakh limit to micro enterprises to help them meet immediate working capital needs at affordable interest rates. The scheme will include credit guarantee cover, a first for such a product, reported Financial Express.

Currently, credit cards come with an interest-free period of up to 30-45 days, which can differ across cards and banks. After the interest-free period, banks charge a 2-2.5% interest rate per month or a 25-30% interest per annum. Some banks charge even higher rates.

Small firms often face cash flow challenges, particularly with delayed payments from larger companies, sometimes stretching to 90 days...