Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in economic growth by generating employment and contributing to GDP. However, one of the biggest challenges for MSMEs is accessing easy and affordable credit. To bridge this gap, banks and financial institutions offer MSME Credit Cards, which provide businesses with easy access to working capital, flexible repayment options, and attractive interest rates.
In this guide, we will cover everything about MSME Credit Cards, including their benefits, eligibility criteria, application process, and a list of top banks offering MSME credit cards.
What is an MSME Credit Card?
An MSME Credit Card is a financial product designed specifically for small and medium-sized businesses to manage short-term financial needs. It helps MSMEs access collateral-free loans, offers a pre-approved credit limit, and provides benefits like lower interest rates and simplified documentation.
These credit cards work like regular business credit cards but come with additional advantages such as government-backed schemes, special discounts, and business-related perks.
Benefits of MSME Credit Card
Easy Access to Working Capital: Helps manage cash flow and operational expenses efficiently.
Pre-Approved Credit Limit: MSME owners get a credit limit based on their business turnover and banking history.
Lower Interest Rates: Compared to regular credit cards, MSME credit cards come with lower interest rates.
Collateral-Free Loan Facility: Many banks offer unsecured loans under MSME credit card schemes.
Flexible Repayment Options: Businesses can repay the amount in easy EMIs based on their financial situation.
Government-Backed Support: Some MSME credit cards come under government schemes like PMEGP, CGTMSE, etc.
Additional Business Benefits: Discounted rates on business expenses like fuel, office supplies, and digital marketing tools.
Top Banks Offering MSME Credit Cards in India
1. SBI MSME Credit Card
- Credit Limit: Up to ₹10 lakh
- Interest Rate: 9.75% to 12.5% per annum
- Collateral: No collateral required
- Eligibility: MSMEs with good banking history and GST registration
- Repayment Tenure: Flexible repayment in 12-60 months
- Special Benefits: Revolving credit facility, working capital support
2. HDFC Bank MSME Credit Card
- Credit Limit: ₹50,000 to ₹5 lakh
- Interest Rate: 10% to 14% per annum
- Collateral: Not required
- Eligibility: Business must be registered under MSME Act
- Repayment: Up to 48 months
- Additional Benefits: Fuel surcharge waiver, business expense tracking
3. ICICI Bank MSME Credit Card
- Credit Limit: ₹1 lakh to ₹15 lakh
- Interest Rate: 11% to 15% per annum
- Collateral: No collateral required
- Eligibility: Minimum business turnover of ₹10 lakh per year
- Repayment: Flexible EMI options available
- Special Features: 50-day credit period, cashback on business transactions
4. Axis Bank MSME Credit Card
- Credit Limit: ₹50,000 to ₹10 lakh
- Interest Rate: 9% to 14% per annum
- Collateral: Not required
- Eligibility: Business should be at least 2 years old
- Repayment: Up to 60 months
- Additional Benefits: Special discounts on business purchases
5. Bank of Baroda MSME Credit Card
- Credit Limit: ₹1 lakh to ₹5 lakh
- Interest Rate: 9.5% onwards
- Collateral: No collateral required
- Eligibility: GST-registered MSME businesses
- Repayment: Flexible repayment plans
- Special Features: Zero processing fees for certain limits
6. Punjab National Bank (PNB) MSME Credit Card
- Credit Limit: ₹50,000 to ₹5 lakh
- Interest Rate: 10% onwards
- Collateral: Not required
- Eligibility: MSMEs registered under Udyam Aadhaar
- Repayment: 3 to 5 years
- Special Features: Low processing fees, digital application process
7. Union Bank MSME Credit Card
- Credit Limit: ₹1 lakh to ₹7.5 lakh
- Interest Rate: 9.5% to 13%
- Collateral: Not required for amounts up to ₹5 lakh
- Eligibility: Small businesses and self-employed individuals
- Repayment: Up to 60 months
- Special Features: Cashback on business expenses, fuel surcharge waiver
Eligibility Criteria for MSME Credit Card
While eligibility criteria vary from bank to bank, some general requirements include:
Business Registration: The enterprise must be registered as an MSME under Udyam Registration.
Business Turnover: Minimum turnover requirement (varies between banks, usually ₹10 lakh per year).
Banking History: A good track record of transactions with no loan defaults.
GST Registration: Most banks require businesses to have a valid GST number.
Business Vintage: The business should have been operational for at least 1-2 years.
How to Apply for an MSME Credit Card?
Online Application
- Visit the official website of the selected bank.
- Fill in the application form with business details and personal information.
- Upload the required documents such as GST registration, Udyam certificate, bank statements, etc.
- Submit the form and wait for verification.
- Once approved, the credit card will be dispatched to your registered address.
Offline Application
- Visit the nearest bank branch.
- Fill out the MSME credit card application form.
- Provide required documents.
- Bank officials will process your request.
- Once approved, you will receive the credit card.
Documents Required for MSME Credit Card
- PAN Card & Aadhaar Card of business owner
- Udyam Registration Certificate
- GST Registration Certificate
- Business Bank Statements (Last 6 months)
- Income Tax Returns (ITR) of the last 2 years
- Address Proof (Utility Bill, Rental Agreement, etc.)
FAQs About MSME Credit Cards
1. What is the minimum credit limit of an MSME credit card?
The minimum credit limit generally starts from ₹50,000, but it depends on the bank and the business’s financial history.
2. Can I use an MSME credit card for personal expenses?
No, MSME credit cards are strictly meant for business-related expenses.
3. Do MSME credit cards require collateral?
Most banks offer collateral-free MSME credit cards for limits up to ₹5-10 lakh.
4. Is a CIBIL score required for an MSME credit card?
Yes, banks check the credit score of business owners. A score above 700 is generally preferred.
5. Can new businesses apply for an MSME credit card?
Yes, but most banks require at least 1-2 years of business operation for eligibility.
Conclusion – MSME Credit Card
An MSME Credit Card is a great financial tool for small businesses looking to manage cash flow, expand operations, and avail of easy credit. With low-interest rates, collateral-free loans, and flexible repayment options, these credit cards provide crucial financial support.
If you are an MSME owner, explore the options from SBI, HDFC, ICICI, Axis Bank, PNB, Bank of Baroda, and Union Bank to find the best MSME credit card that fits your business needs.