Big Relief for Small Businesses: Govt to Launch Low-Interest Credit Cards with Rs5 Lakh Limit
Small businesses and micro-enterprises could soon receive a major financial boost. The central government is gearing up to introduce a low-interest credit card scheme this month, aimed at making credit more affordable and accessible for smaller players who often struggle with cash flow issues.
Why this move matters
For many small businesses, managing day-to-day expenses isn’t easy. Delayed payments from large clients and limited access to affordable loans often force them to rely on high-interest borrowing options. This upcoming scheme is designed to ease that burden by offering a more practical and cost-effective way to access funds.
Key features of the proposed scheme
The government is likely to offer unsecured credit cards with limits of up to ₹5 lakh to micro and small enterprises. Unlike traditional credit cards that charge steep interest rates between 36% and 42%, this new card is expected to come with a much lower rate of around 18%.
Another attractive feature is the 30-day interest-free period, allowing businesses to manage short-term expenses without immediately incurring costs. Along with this, flexible repayment options are expected to make it easier for businesses to handle their finances without stress.
Making it work: Support for banks
To ensure wide adoption of the scheme, the government is also planning to support banks. It may bear part of the cost of issuing the first 10 lakh credit cards, making it less expensive for banks to onboard customers.
Why this move matters
For many small businesses, managing day-to-day expenses isn’t easy. Delayed payments from large clients and limited access to affordable loans often force them to rely on high-interest borrowing options. This upcoming scheme is designed to ease that burden by offering a more practical and cost-effective way to access funds. Key features of the proposed scheme
The government is likely to offer unsecured credit cards with limits of up to ₹5 lakh to micro and small enterprises. Unlike traditional credit cards that charge steep interest rates between 36% and 42%, this new card is expected to come with a much lower rate of around 18%.Another attractive feature is the 30-day interest-free period, allowing businesses to manage short-term expenses without immediately incurring costs. Along with this, flexible repayment options are expected to make it easier for businesses to handle their finances without stress.
Making it work: Support for banks
To ensure wide adoption of the scheme, the government is also planning to support banks. It may bear part of the cost of issuing the first 10 lakh credit cards, making it less expensive for banks to onboard customers.Next Story