New Delhi, May 6 (KNN) India’s Micro, Small and Medium Enterprises (MSME) sector offers a significant lending opportunity with a credit gap of approximately Rs 28 lakh crore, according to a recent report by Mavenark.

The findings highlight the sector’s growing prominence in the Indian economy and underscore the impact of policy interventions in improving credit accessibility.

As of March 2024, the total MSME lending market across various ticket sizes and player groups reached approximately Rs 35 trillion. During FY2024, MSME credit expanded by 22 percent, driven by strong loan demand.

However, the first half of FY2025 has witnessed a slowdown in credit growth due to broader market conditions and regulatory concerns regarding overleveraging and asset quality.

MSMEs continue to be a vital contributor to India’s economic landscape, accounting for 29.2 percent of the country’s GDP in FY2022. The Government expects this contribution to increase substantially to 40-50 percent by FY2030.

The sector also represented 45.7 percent of India’s exports in FY2024, emphasising its critical role in economic growth and international trade engagement.

To address the diverse financing requirements of MSMEs, banks and non-banking financial companies (NBFCs) offer various credit products including loans against property, supply chain financing, inventory funding, and unsecured business loans.

These tailored financial solutions serve as essential enablers for MSME operations and expansion plans.

The report acknowledges that initiatives at the policy level by the Government of India, the Reserve Bank of India (RBI), and other stakeholders have been instrumental in enhancing credit access for MSMEs.

It suggests that addressing the substantial credit gap with timely and adequate financing solutions could unlock tremendous potential in the MSME sector, positioning it as a key driver of India’s economic growth in the coming years.

(KNN Bureau)