Introduction
The State Bank of India (SBI) has issued a new Master Circular for its small business lending product – SBI SME Laghu Udyami Loan, earlier known as the SME Credit Card.
This circular consolidates all previous instructions up to August 31, 2025, providing updated guidelines for easier access to business finance for small and micro enterprises.
The SME Credit Card scheme was first introduced in 2003–04 to provide simplified finance up to ₹10 lakhs to small businesses and professionals based on a scoring model.
Objective of the Scheme
The main goal of the SBI SME Laghu Udyami Loan is to offer easy and collateral-free finance to small and micro enterprises (MSMEs), professionals, and self-employed individuals for any type of business-related financial need — such as purchasing equipment, expanding operations, or managing working capital.
Key Features of the Scheme
| Feature | Details |
| Scheme Name | SME Laghu Udyami (SME Credit Card) |
| Target Group | Micro & small enterprises, SSI units, retail traders, professionals, self-employed individuals |
| Type of Facility | Cash Credit (CC) and/or Term Loan |
| Maximum Loan Amount | Up to ₹10 lakh |
| Collateral | Nil (No collateral required) |
| Interest Rate | EBR + 3.25% p.a. (Current effective rate ~11.40% p.a.) |
| Margin | Up to ₹50,000 – NIL₹50,001 to ₹10 lakh – 10% |
| Validity Period | 3 years (subject to annual review) |
| Processing Charges | As per CPPD Card Rates |
| Application Portal | Jansamarth Portal (using Mudra BRE once IT system is ready) |
Eligibility Criteria
To be eligible for the SBI SME Laghu Udyami Loan, the applicant must:
- Have a satisfactory business track record of at least 2 years.
- Possess a valid PAN and Udyam Registration Number (URN).
- Belong to one of the following categories:
- Micro or Small Enterprise
- Retail Trader
- Professional or Self-Employed Person
- Transport Operator (SRTO)
- Micro or Small Enterprise
- Even units not currently availing credit from any bank may be considered if they have strong credentials and good performance.
Scoring Model and Go/No-Go Criteria
- SBI uses a Scoring Model to assess eligibility.
- The applicant must score at least 60% to qualify.
- The unit must also meet Go/No-Go criteria based on credit reports from CRIF High Mark, Experian, or CIBIL.
- The minimum acceptable CIBIL score is 680 or equivalent from other agencies.
Loan Amount and Repayment Terms
| Type of Loan | Tenure | Details |
| Cash Credit (CC) | 3 years | Repayable on demand, with annual review |
| Term Loan (Below ₹5 lakh) | Up to 5 years | Includes a moratorium period of up to 6 months |
| Term Loan (₹5 lakh & above) | Up to 7 years | Includes a moratorium of up to 12 months; interest to be serviced during moratorium |
Note:
During annual review, if credit turnover in the account is less than 75% of sales realization, the bank may fix a monthly repayment schedule for the outstanding balance.
Security and Insurance
- Primary Security: Hypothecation of stocks, machinery, or movable assets purchased with the loan.
- Collateral Security: Not required (Nil collateral).
- All loans are covered under the Credit Guarantee Fund for Micro Units (CGFMU) as per the Mudra scheme.
- Comprehensive insurance must be taken for stocks, machinery, and other assets financed by the bank.
Other Important Guidelines
- Borrowers will be provided with an Insta Deposit Card and YONO Business Internet Banking access.
- Wherever possible, the borrower will also be given POS/QR Code facilities.
- Stock statements must be submitted quarterly, and inspections will be conducted yearly or quarterly as per SBI norms.
- If the account turns into SMA/NPA, inspection frequency will increase to every two months.
How to Apply
- Visit the Jansamarth Portal.
- Select “SBI SME Laghu Udyami Loan” under available schemes.
- Fill in the required details and upload documents (PAN, Udyam Registration, etc.).
- Your application will be evaluated based on the Scoring Model and CIC report.
- Once eligible, the loan will be sanctioned as per SBI norms.
Required Documents
- PAN Card
- Udyam Registration Certificate
- Proof of business existence (minimum 2 years)
- Latest bank statement
- Identity and address proof
- Income Tax Return (for professionals/self-employed)
Conclusion
The SBI SME Laghu Udyami Loan Scheme 2025 is a valuable initiative for India’s micro and small business owners.
It offers hassle-free finance up to ₹10 lakh without any collateral, a simplified application process, and flexible repayment options.
If you’re a small entrepreneur or self-employed individual looking to expand your business or manage working capital smoothly, this SBI scheme can be a perfect choice.