MSMEs get a boost with enhanced credit access, Kisan Credit Card loan limit raised

Union Budget 2025

In a major move for the agricultural sector, the government has raised the Kisan Credit Card (KCC) loan limit from Rs 3 lakh to Rs 5 lakh, said Nirmala Sitharaman while presenting Union Budget 2025.

The step aims to provide farmers with better access to formal credit and reduce their dependence on high-interest informal borrowing, FM said.

Sandeep Chilana, Managing Partner at Chilana & Chilana Law Offices, highlighted the government's push to position MSMEs as the "second engine of growth."

"The Budget pays specific attention to MSMEs by improving credit facilities, introducing specialized credit cards for SMEs and enhancing the threshold for qualification," he said.

Chilana welcomed the decision but stressed the need for efficient loan disbursal.

"The key challenge will be ensuring smooth and quick loan access, especially for small and marginal farmers. The government must also implement safeguards to prevent over-borrowing and ensure that increased credit translates into real benefits rather than additional debt burdens," he added.