Date: 2026-01-29Category: Press ReleaseState: Union GovernmentCountry: India
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
**Executive Summary**
This document outlines the revised investment and turnover limits for classifying Micro, Small, and Medium Enterprises (MSMEs), aimed at enhancing efficiency, technological advancement, and access to capital. It also discusses the provision of credit cards to Udyam-registered micro enterprises for easier access to working capital, effective 01.04.2025. The information was released on January 29, 2026.
**Key Points / Main Content**
* **MSME Classification Revision:**
* Investment and turnover limits for MSME classification have been revised to improve efficiency, encourage technological upgrades, and enhance access to capital.
* **Credit Access for Micro Enterprises:**
* Credit cards will be issued to Udyam-registered micro enterprises for faster access to credit and to promote digital transactions.
* **Loan Timelines for Micro and Small Enterprises:**
* Banks are advised to finalize credit decisions for loans up to ₹25 lakh within 14 working days.
* Timelines for loans above ₹25 lakh should align with Board-approved sanction time norms.
* Banks must display all credit-related information for MSMEs, including timelines and document checklists, on their websites.
* **Credit Guarantee Scheme (CGS) Monitoring:**
* Loan applications, sanctioned amounts, and disbursements under the CGS for MSEs are monitored quarterly by the Empowered Committee on MSME.
* **Enhanced Credit Guarantee Cover:**
* The credit guarantee cover has been increased from ₹5 crore to ₹10 crore under the CGS, effective April 1, 2025.
* A total of 1,778 guarantees amounting to ₹12,498 crore have been approved to MSEs in the slab of ₹5 crore to ₹10 crore in the FY 2025-26 till December 31, 2025.
* **Fund of Funds for Startups (FFS):**
* The Government has established the FFS, operationalized by SIDBI, to catalyze venture capital investments in startups.
* AIFs supported under FFS are required to invest at least two times the amount committed under FFS in startups.
* As of December 31, 2025, AIFs have invested approximately ₹25,547.98 crore in 1,371 startups, including ₹3,802.86 crore in 205 women-led startups.
**Impact Analysis**
**MSMEs (Micro, Small, and Medium Enterprises)**
* **Impact:** Revised investment and turnover limits facilitate growth and technological advancements. Easier access to credit via credit cards and enhanced guarantee cover.
* **Action Required:** MSMEs should register on the Udyam portal to avail credit card benefits and understand the revised classification criteria.
**Banks**
* **Impact:** Need to adhere to strict timelines for credit decisions, display relevant information on their websites, and participate in the CGS.
* **Action Required:** Banks need to ensure compliance with the revised loan processing timelines and provide clear information to MSMEs, as well as align with CGS guidelines.
**Startups**
* **Impact:** Access to increased venture capital funding through the Fund of Funds for Startups (FFS) initiative.
* **Action Required:** Startups should seek funding opportunities via SEBI-registered Alternative Investment Funds (AIFs).
Key Entities Referenced
Micro, Small and Medium Enterprises (MSMEs): Enterprises classified based on investment and turnover, subject to revised limits for improved efficiency and competitiveness.
Credit Guarantee Scheme (CGS): Scheme providing credit guarantee for loans to Micro and Small Enterprises (MSEs), with enhanced cover up to Rs. 10 crore.
Fund of Funds for Startups (FFS): Government initiative to catalyze venture capital investments in startups, operationalized by SIDBI.
Ministry of Micro, Small & Medium Enterprises: The ministry responsible for policies and initiatives related to MSMEs.
Small Industries Development Bank of India (SIDBI): Operationalizes the Fund of Funds for Startups (FFS), providing capital to SEBI-registered Alternative Investment Funds (AIFs).
Ministry of Micro,Small & Medium Enterprises
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
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
प्रव तथ: 29 JAN 2026 7:16PM by PIB Delhi
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 oftransaction 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 31st
December 2025. Of this, Rs. 3,802.86 crore has been invested in 205 women-led startups as on 31st
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 today.
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AKS
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