RBI doubles collateral-free loan limit for small businesses
Starting April 1, 2026, small business owners can now get up to ₹20 lakh in loans without needing to put up any collateral, thanks to a new move by the RBI.
This is double the previous limit under the Pradhan Mantri Mudra Yojana and aims to make it easier for micro and small enterprises, including first-generation entrepreneurs, to access funds.
What are the eligibility criteria?
The higher loan limit covers manufacturing, services, and related sectors.
If you're part of the Prime Minister Employment Generation Programme (PMEGP), you're eligible too.
Banks may even offer up to ₹25 lakh if your credit history looks good.
This move is expected to boost entrepreneurship and business growth
This change means more micro and small enterprises, including first-generation entrepreneurs, can get formal credit without risking personal assets.
With backing from the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), it's designed to help more people grow their businesses or finally take that leap into entrepreneurship.