In what could be a big boost to the country’s evolving micro, small and medium enterprises (MSME) space, Finance and Corporate Affairs Minister Nirmala Sitharaman may launch a Unified Payments Interface (UPI)-powered digital lending facility for the segment on March 6, sources told Zee Business. 

As part of this facility, MSMEs will be able to borrow funds based on their digital transactions.

A dedicated portal will be launched for this purpose, onboarding almost all major PSU and private sector banks, according to the sources. 

The development follows digital lending activities undertaken by State Bank of India (SBI) and Bank of Maharashtra under a pilot project. 

The Union Minister announced the establishment of such a facility in the Narendra Modi 3.0 government’s first Budget, presented in July last year. 

In the Budget for 2025-26, unveiled on February 1, the finance minister mentioned support for MSMEs among its 10 major development measures.

“Currently, over one crore registered MSMEs, employing 7.5 crore people and generating 36 per cent of our manufacturing, have come together to position India as a global manufacturing hub. With their quality products, these MSMEs are responsible for 45 per cent of our exports,” the finance minister said.

“To help them achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively. This will give them the confidence to grow and generate employment for our youth,” she added.

The Union Budget 2025 doubled the credit guarantee cover for MSMEs to Rs 10 crore, leading to additional credit of Rs 1.5 lakh crore in the next five years.

The finance minister also announced the introduction of customised credit cards with a Rs 5 lakh limit for micro enterprises registered on the Udyam portal, with a goal of 10 lakh cards to be issued in the first year itself.