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Rs 28 trillion MSME credit gap signals lending potential
Industry News- May 08,25
As of March 2024, the total MSME lending market stood at Rs 35 trillion, and in FY2024 alone, credit to the sector expanded by 22%, driven by rising loan demand.
India’s Micro, Small, and Medium Enterprises (MSME) sector presents a major lending opportunity, with a credit gap of approximately Rs 28 trillion, according to a recent report by Mavenark. The report emphasises the growing role of MSMEs in the national economy and highlights the need for enhanced credit access through policy interventions and financial innovation.
As of March 2024, the total MSME lending market stood at Rs 35 trillion, and in FY2024 alone, credit to the sector expanded by 22%, driven by rising loan demand. However, the first half of FY2025 saw a slowdown in lending, attributed to macroeconomic conditions and regulatory caution around overleveraging and asset quality.
MSMEs accounted for 29.2% of India’s GDP in FY2022, with government projections aiming to raise this to 40–50% by FY2030. The sector also contributed to 45.7% of India’s exports in FY2024, underscoring its critical role in economic growth and international trade.
Banks and NBFCs have developed a range of financial products—including loans against property, supply chain finance, and unsecured business loans—to meet MSME credit needs. The report stresses that timely and adequate financing, supported by initiatives from the
Government of India and the RBI, can unlock the sector’s full potential, enabling MSMEs to serve as a key driver of India’s future growth trajectory.
(ANI)
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Rs 28 trillion MSME credit gap signals lending potential
As of March 2024, the total MSME lending market stood at Rs 35 trillion, and in FY2024 alone, credit to the sector expanded by 22%, driven by rising loan demand.
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