Revised MSME Investment and Turnover Limits to Boost Scale, Technology Upgradation and Global Competitiveness

Ø Limits of investment and turnover for classification of Micro, Small and Medium Enterprises (MSMEs) revised to enable higher efficiencies of scale, encourage technological up-gradation, better access to capital and enhance global competitiveness

Ø Credit cards to Udyam-registered Micro enterprises provide faster and easier access to credit for meeting working capital requirements and also promoting digital transactions among MSMEs

1. Revised MSME Classification

· Investment and turnover limits for MSMEs have been revised.

· Objective: enable higher efficiencies of scale, technology adoption, better capital access, and global competitiveness.

· Safeguards: continued support via Priority Sector Lending, Public Procurement Preferences, and schemes to prevent exclusion or monopolization by larger firms.

2. Credit Access Improvements

· Loan timelines:

o Up to ₹25 lakh → decision within 14 working days.

o Above ₹25 lakh → as per bank board-approved norms.

· Banks must display MSME credit information (timelines, document checklist) prominently on their websites.

3. Credit Guarantee Scheme (CGS)

· Guarantee cover for MSEs enhanced from ₹5 crore to ₹10 crore (effective 1 April 2025).

· FY 2025–26 (till Dec 2025): 1,778 guarantees approved, worth ₹12,498 crore in the ₹5–10 crore slab.

· Monitoring: quarterly review by RBI-chaired Empowered Committee and State Level Bankers’ Committees.

4. Credit Cards for Micro Enterprises

· Issued to Udyam-registered micro enterprises.

· Purpose: faster access to working capital, promote digital transactions, and enable data-driven credit assessment.

5. Fund of Funds for Startups (FFS)

· Managed by SIDBI, channeling capital to SEBI-registered Alternative Investment Funds (AIFs).

· Requirement: AIFs must invest 2x the FFS commitment in startups.

· As of Dec 2025:

o ₹25,547.98 crore invested in 1,371 startups.

o ₹3,802.86 crore invested in 205 women-led startups.

Overall Takeaway

The government is strengthening MSME support through revised classification, faster credit access, expanded guarantees, and digital credit tools, while also boosting startup funding via SIDBI’s Fund of Funds. These measures aim to balance scale efficiencies with inclusive growth, ensuring MSMEs remain competitive globally while safeguarding micro enterprises.

[ABS News Service/30.01.2026]

The limits of investment and turnover for the classification of Micro, Small and Medium Enterprises (MSMEs) was revised to enable them for achieving higher efficiencies of scale, encourage adoption of technological up-gradation, better access to capital and to enhance global competitiveness. The revised classification is supported by a well designed framework that ensures continued support to Micro, Small and Medium Enterprises (MSMEs) through Priority Sector Lending, Public Procurement Preferences and various schemes & programmes for ruling out the risk of exclusion and monopolization by larger MSMEs.

As informed by DFS, as per RBI, for loans up to 25 lakh to units in the Micro and Small Enterprises borrowers, banks are advised that the timelines for credit decisions shall not be more than 14 working days. For loans above the aforementioned limit, timelines shall be as per the Board approved sanction time norms. All credit related information pertaining to MSMEs including timelines for credit decisions, indicative document checklist etc., shall be displayed under a separate tab prominently on the bank’s website.

As informed by CGTMSE, loan applications, amount sanctioned and disbursed by Banks under the Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs) is being monitored on a quarterly basis by the Empowered Committee on MSME, chaired by Reserve Bank of India and the State Level Bankers' Committee [SLBC].

In order to improve access to credit, the credit guarantee cover has been enhanced for MSEs, from Rs. 5 crore to Rs. 10 crore (w.e.f 01.04.2025) under CGS. As a result, a total of 1,778 guarantees amounting to Rs. 12,498 crore have been approved to MSEs in the slab of Rs. 5 crore to Rs. 10 crore in the FY 2025-26 till 31.12.2025.

As informed by DFS, the objective of issuing credit cards to Micro Enterprises is to provide Udyam-registered micro enterprises with faster and easier access to credit for meeting their working capital requirements. The scheme also aims to promote digital transactions among MSMEs, enabling the use of transaction data for assessing future credit needs and monitoring end-use of funds. The beneficiaries of the scheme shall be all Udyam-registered micro enterprises requiring working capital finance.

The Government has established the Fund of Funds for Startups (FFS) to further catalyze venture capital investments. It is operationalized by Small Industries Development Bank of India (SIDBI), which provides capital to SEBI-registered Alternative Investment Funds (AIFs) which in turn invest in startups. AIFs supported under FFS are required to invest at least two times of the amount committed under FFS in startups.

These AIFs have invested around Rs. 25,547.98 crore in 1,371 startups from across the country as on 31^st December 2025. Of this, Rs. 3,802.86 crore has been invested in 205 women-led startups as on 31^st December 2025.

This information was given by the Minister of State for Micro, Small and Medium Enterprises (Sushri Shobha Karandlaje) in a written reply in Lok Sabha on 29 January, 2026.