Collateral-Free Loan Limit Doubled To ₹20 Lakh | Big MSME Boost

India has announced a major boost for the MSME sector by doubling the collateral-free loan limit to ₹20 lakh. The move is aimed at improving access to credit for micro and small enterprises, enabling them to expand operations without the burden of providing security. Rajneesh, Additional Secretary, Ministry of MSME, highlighted that this revised limit has come into effect from April 1, 2026. The decision is expected to significantly enhance liquidity, support business growth, and encourage entrepreneurship across the country. With easier financing and reduced risk for borrowers, this step strengthens the government’s push to empower MSMEs—often considered the backbone of India’s economy—and drive sustained economic growth.