The Union Budget 2025 has brought significant changes aimed at empowering MSMEs and addressing their key challenges. Fintech leaders across the industry are reacting positively to the measures that focus on expanding access to credit, promoting digital innovation, and supporting entrepreneurship among marginalized groups. With enhanced credit guarantees, customized credit cards, and priority sector lending initiatives, the budget sets the stage for MSMEs to scale up their operations and drive growth across India’s economy. Leaders from PayNearby, Veefin Capital, BizongoFin, and other fintech companies have hailed the reforms, which they believe will enhance financial inclusion, ease of doing business, and global competitiveness for India’s MSME sector.
Mr. Anand Kumar Bajaj, Founder, CEO & MD, PayNearby
“The Union Budget 2025 takes bold steps to foster rural growth, women empowerment, and MSME ecosystem, unlocking significant opportunities for economic growth in Bharat. Easing credit for women, Scheduled Caste and Tribes, and first-time entrepreneurs with loans up to ₹2 Crore, alongside the revamped support for MSMEs, will not only empower local businesses but also ensure a more robust economic framework. The increase in credit guarantee covers, along with the introduction of customized credit cards for micro-enterprises, will provide much-needed relief to entrepreneurs and help sustain business growth in local economies. The announcement to develop Grameen Credit Score framework to serve the credit needs of SHG members and people in rural areas is a welcome step to boost rural economy, especially women economic development through SHG framework. Additionally, the revamped KYC process will streamline business operations, making it more efficient across sectors, while the enhanced PM Svanidhi scheme will support street vendors by encouraging digital payments and reducing reliance on informal credit.
With PayNearby Digital Naari’s focus on bridging the financial, digital and healthcare gaps among women, especially rural women, it is encouraging to see Saksham Anganwadi and Poshan 2.0 programs getting announced. This will work towards improving the nutritional support for women and children, leading to better food security for women. Overall, PayNearby welcomes the focus on women and rural economy, and steps that boost more economic participation by women and drives rural development is important for the next orbit of growth for the country.”
Shantanu Bairagi, CEO – Veefin Capital
“The role of MSMEs in the journey towards Viksit Bharat has been called out clearly by the Finance Minister and commensurate to that are some of the fiscal and policy measures announced in the budget to boost the backbone of the economy.
Credit & MSME
Availability of credit access, simplification of CKYC and enhancement of credit guarantee covers for MSMEs, startups and exporters stand out as key fiscal support measures from the Government of India. A big increase in Udyam registrations, which is an indicator of extent of formalization of small and medium businesses, is expected with customized credit cards with INR 5L limit being introduced for registered businesses. With the government expecting to give 10 Lakh credit cards in a year, this is going to be yet another measure to incentivize MSME businesses to formalize and have faster access to working capital. The enhancement in the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively will spur widespread adoption of digitization among small businesses and bring them on par in terms of access to commerce and capital.
The Manufacturing Mission to furthering Make in India and Make for the World by improving ease of doing business, create a vibrant MSME ecosystem and improve availability of technology will enhance the credit worthiness of small and medium sized and boost the confidence of financial institutions in doubling up their efforts to lend to MSME. The Economic Survey has already indicated how banks credit to MSMEs has grown 13% y-o-y. Some of the measures announced in the budget will further boost credit for the MSME ecosystem.
DPI
India’s steadfast approach to being recognized as an example in building digital public infrastructure got yet another boost with the announcement of ‘BharatTradeNet’ (BTN) for international trade – a unified platform for trade documentation and financing solutions.”
Sundeep Mohindru, Founder and Promoter, M1xchange
“The Union Budget 2025 has given much-needed attention to MSMEs, recognizing them as the key driver of India’s economy and global competitiveness. The enhancements in definition of MSME, upto ₹125 crore of investment in plant and machinery and an annual turnover of ₹500 crores, will provide much-needed support to MSMEs in scaling operations, embracing new technologies, and accessing capital more efficiently. With new definition the benefit of TReDS will expand to larger set of enterprises for facility of early realisation of their dues from customers, who were earlier deprived of this benefit.
Expanding the credit guarantee cover and introducing customized credit cards for micro-enterprises will inject much-needed capital liquidity into the MSME sector, allowing businesses to invest in growth and innovation. Further, set up of Bharat Trade Net portal will digitalise the documentation flow of cross border business and enhance possibility of cross border finance for MSME exporters in big way on ITFS (International Trade Finance System) platform.
The next level initiative by government to decriminalise 100 more provisions under various Acts will give confidence to businesses to invest more and experience the ease of doing business. Additionally, the Manufacturing Mission’s emphasis on workforce development, and technology adoption will further strengthen India’s position as a global manufacturing powerhouse. Especially, with global companies increasingly looking to India as a preferred business destination, these measures will not only improve MSME productivity and competitiveness but also accelerate the ‘Make in India’ vision, helping position India as a dominant player in the global supply chain.”
Kiran Dev, CEO, BizongoFin (MSME)
The government’s emphasis on strengthening MSMEs in this year’s budget is evident. Increasing the credit guarantee cover from ₹5 crore to ₹10 crore is a crucial step that will unlock ₹1.5 lakh crore in additional credit over the next five years. Additionally, a term loan of up to ₹20 crore will be provided to well-run export-oriented MSMEs, further supporting their expansion. With MSMEs employing 7.5 crore individuals and contributing 36% to manufacturing, these measures will bolster their growth, enhance financial access, and reinforce India’s position as a global manufacturing hub.”
Pushkar Mukewar, Co-Founder and CEO, Drip Capital
“The Union Budget 2025 strongly emphasises exports as a key pillar of economic growth, bringing much-needed support to MSME exporters who contribute nearly 45% of India’s total exports. The enhancement of investment and turnover limits for MSME classification and the significant expansion of credit guarantee cover for well-performing exporter MSMEs will enable businesses to scale efficiently and access capital more easily.
Establishing the Export Promotion Mission and BharatTradeNet (BTN) as a unified digital public infrastructure for trade documentation and financing solutions is a welcome step. By streamlining access to export credit and cross-border factoring, these initiatives will improve liquidity and reduce operational bottlenecks for exporters. Additionally, aligning BTN with international trade practices will enhance India’s ease of doing business and strengthen our position in global markets.
Reducing customs duties on key seafood industry inputs will further boost the competitiveness of Indian seafood exports, helping businesses expand their global footprint. With these policy measures, the government has reaffirmed its commitment to making India a leading player in global trade while empowering MSMEs with the right financial and digital infrastructure to compete internationally.”
Munindra Verma, CEO, M1 NXT
“The Union Budget 2025 takes a progressive approach by recognizing exports as a key pillar of economic growth. The establishment of the Export Promotion Mission and Bharat Trade Net as a unified digital public infrastructure will significantly enhance trade facilitation, and help MSMEs build a strong digital trail, enhancing the trust of financial institutions in their businesses. With digital documentation, transparency in trade transactions will improve, leading to greater credit infusion and improving access to export credit and cross-border factoring support for a better financial inclusion for MSMEs.
We believe that the emphasis on easing financial bottlenecks for exporters, particularly MSMEs, will be beneficial in long term. Further addressing non-tariff barriers will strengthen India’s global trade competitiveness. With simplified access to trade finance and seamless digital documentation will be instrumental in driving efficiency, liquidity, and ease of doing business in international markets. These measures mark a crucial step toward positioning India as a stronger player in global trade.”
Gurjodhpal Singh, CEO, Tide India: (MSME)
“The Union Budget 2024-25 has made notable progress in addressing the needs of MSMEs, aligning with several key expectations. The enhancement of investment and turnover limits for MSME classification by 2.5 and 2 times, respectively, is a forward-looking step that will encourage scalability and job creation, particularly for the youth. This move is likely to instill confidence in MSMEs to expand their operations and contribute more significantly to employment generation.
The substantial increase in credit guarantee cover—up to ₹10 crore for Micro and Small Enterprises and ₹20 crore for Startups—addresses the persistent challenge of access to capital. The introduction of customized Credit Cards for micro-enterprises is another positive step, simplifying funding and fostering operational efficiency. Additionally, the budget’s emphasis on inclusivity, through schemes offering term loans up to ₹2 crore for women, SCs, and STs first-time entrepreneurs, alongside online capacity-building programs, is commendable. The recognition of gig workers through identity cards and healthcare benefits under PM Jan Arogya Yojana further supports the new-age services economy.
However, the budget falls short in certain areas. A more focused approach to leveraging AI in business and fintech partnerships could have significantly improved access to credit for MSMEs. While initiatives like transforming India Post into a public logistics organization and leveraging rural post offices for economic growth indirectly promote digitization, a direct push for AI-driven solutions would have been more impactful. Additionally, explicit tax reforms to ease compliance burdens on MSMEs remain unaddressed, which could have further strengthened the sector.
Overall, the budget lays a solid foundation for MSME growth, with a focus on credit availability, scalability, and inclusivity. While it misses opportunities to address AI integration and tax reforms, the measures announced are poised to empower MSMEs to drive economic recovery, job creation, and India’s vision of becoming a global manufacturing hub. The success of these initiatives will depend on effective implementation and continued focus on addressing gaps in the future.”
Pallavi Shrivastava, Co-founder, Progcap
“Progcap welcomes the Union Budget 2025, which strengthens the foundation for MSME growth by addressing long-standing challenges in access to credit, scalability, and global competitiveness.
A major highlight of this budget is the enhanced Priority Sector Lending (PSL) classification, with investment limits increased by 2.5 times and turnover limits doubled. This change expands the pool of MSMEs eligible for PSL-linked credit, incentivizing financial institutions to direct more funding into the sector. With more MSMEs qualifying for PSL benefits, businesses will have better access to affordable capital, reducing their reliance on high-cost borrowing and fostering long-term growth.
For years, one of the biggest hurdles for MSMEs has been securing timely and adequate credit. The expansion of the credit guarantee cover for micro enterprises from ₹5 crore to ₹10 crore is a critical move, unlocking ₹1.5 lakh crore in additional lending over the next five years. This gives financial institutions greater confidence to extend credit to underserved businesses, enabling them to access working capital without collateral.
The introduction of customised credit cards with a ₹5 lakh limit for micro enterprises registered on the Udyam Portal is another step toward financial flexibility. Many small businesses operate with irregular cash flows, and these cards will give them a structured, accessible way to manage short-term expenses. This allows credit distribution at the last mile to an even wider segment of the market.
The budget also introduces a new scheme offering term loans of up to ₹2 crore for first-time women, Scheduled Castes (SC), and Scheduled Tribes (ST) entrepreneurs. Historically, these groups have encountered barriers such as limited access to capital and inadequate managerial support, hindering entrepreneurial pursuits. This initiative not only provides financial assistance but also includes online capacity building for entrepreneurship and managerial skills, empowering marginalized groups to establish and grow their businesses.
With MSMEs contributing 45% to India’s exports, the newly announced export promotion mission will help businesses navigate non-tariff barriers and expand globally. As MSMEs scale up to meet global demand, they will need stronger financial, technical, and skilling support.
We believe these budgetary measures will catalyse the next wave of MSME growth, fostering a more inclusive and resilient financial ecosystem. Progcap looks forward to working with MSMEs to leverage these opportunities, ensuring they have the credit, flexibility, and support needed to grow, innovate, and thrive.”