The RBI has revised the Master Direction on Lending to the MSME Sector to enhance credit access by doubling the mandatory collateral-free loan limit for Micro and Small Enterprises to ₹20 lakh. Banks are now prohibited from demanding collateral within this threshold, including for PMEGP beneficiaries. Well-performing units may receive unsecured limits up to ₹25 lakh based on internal policies, with risk coverage encouraged through credit guarantee schemes. The revised norms, effective for new sanctions and renewals from April 1, 2026, aim to strengthen last-mile credit delivery and reduce reliance on informal borrowing.