India has introduced a series of measures to improve access to financial support for small businesses, farmers, startups, and first-time entrepreneurs. These initiatives demonstrate a sustained effort to promote economic growth and empower individuals across the nation by providing timely and affordable credit.
The Pradhan Mantri Mudra Yojana is one of the flagship programs under this vision. This scheme provides collateral-free credit to individuals seeking loans for income-generating activities in manufacturing, trading, services, and agriculture-allied sectors. Borrowers can apply for loans under different categories based on their needs. The Shishu category provides loans up to $600, while Kishore covers amounts above $600 and up to $6,000. The Tarun category supports loans above $6,000 and up to $12,000, with the additional Tarun Plus category allowing loans up to $24,000 for entrepreneurs who have previously borrowed under the Tarun category and successfully repaid their loans.
The Stand Up India scheme aims to support entrepreneurs from underrepresented communities. Scheduled commercial banks provide loans ranging from $12,000 to $120,000 for greenfield enterprises in manufacturing, trading, and services. Each bank branch is encouraged to fund one borrower from scheduled caste or tribe communities and one woman borrower. This program has led to tangible empowerment, offering a chance for individuals to launch businesses and contribute to economic activity in rural and urban areas.
The government has announced a new scheme for first-time entrepreneurs in the Union Budget 2025-26. Over the next five years, loans of up to $240,000 will be made available to 500,000 women and individuals from scheduled caste and tribe communities who are launching greenfield enterprises. Drawing lessons from the success of the Stand Up India scheme, this initiative includes online capacity-building programs for managerial and entrepreneurial skills.
Farmers also benefit greatly from enhanced financial schemes. The Kisan Credit Card, first introduced in 1998, provides affordable credit for purchasing agricultural inputs and meeting cash requirements for crop production. The scheme now includes working capital requirements for allied activities like animal husbandry, dairy, and fisheries. Under the Modified Interest Subvention Scheme, short-term working capital loans of up to $6,000 are provided at an interest rate of 7 percent per year, with banks receiving an interest subvention of 1.5 percent from the government. Farmers who repay their loans promptly benefit from an additional 3 percent repayment incentive, reducing their effective interest rate to 4 percent annually. The Union Budget 2025-26 increased the loan limit for KCC borrowers from $3,600 to $6,000 to further support agricultural development.
To streamline access to these financial initiatives, the Jan Samarth portal offers a one-stop digital platform linking fifteen government-sponsored loan schemes and subsidies. Applicants can utilize this portal for digital evaluation of their eligibility, ensuring efficient processing of their applications. Digital tools and mobile apps provided by banks and financial institutions have further simplified loan applications, reducing reliance on paperwork and in-person visits.
These efforts collectively highlight the government’s commitment to improving access to affordable credit for entrepreneurs, small businesses, farmers, and startups. By addressing the unique needs of various stakeholders, these programs are playing a pivotal role in driving economic growth, empowering marginalized communities, and creating opportunities for sustainable development. Through innovative platforms and tailored schemes, India continues to solidify its position as a dynamic and inclusive economy with opportunities for all.
