The Union Budget 2025 has introduced a series of reforms aimed at strengthening India’s MSME sector, focusing on easier access to credit, financial inclusion, and growth opportunities. Key measures include an enhanced credit guarantee cover, doubling the limit for micro and small enterprises from ₹5 crore to ₹10 crore, and an increase in investment and turnover classification thresholds, enabling more businesses to qualify for MSME benefits.

One of the standout announcements is the ₹2 crore loan scheme for first-time women entrepreneurs, a step toward bridging the gender credit gap and fostering inclusive economic growth. Additionally, a ₹5 lakh customized credit card for registered micro-enterprises has been introduced to support their working capital needs.

Commenting on the budget, Manish Shah, MD & CEO, Godrej Capital, said: “The recent budget measures reaffirm the government’s commitment to strengthening the MSME ecosystem, a critical pillar of India’s economy. By enhancing credit guarantees and increasing classification thresholds, these reforms will unlock new opportunities for small businesses, enabling them to scale operations with greater financial flexibility. NBFCs and HFCs will play a crucial role in ensuring these benefits reach MSMEs efficiently, bridging credit gaps and driving financial inclusion.

Particularly commendable is the focused push toward women entrepreneurship. The introduction of a dedicated scheme for first-time women entrepreneurs from underserved communities is a game-changer, fostering inclusive growth and financial independence. Additionally, providing term loans to high-performing MSME exporters will fuel competitiveness and global expansion.

By improving access to credit, reducing borrowing costs for startups, and introducing tailored financial solutions for micro-enterprises, these initiatives collectively create a more resilient and future-ready MSME sector. With their agility and deep market expertise, NBFCs and HFCs will be instrumental in supporting small businesses and homebuyers alike, strengthening India’s journey toward self-reliance and sustained economic progress.”