The MSME (Micro, Small and Medium Companies) faces a addressable credit gap of around ₹ 30 Lakh Crore, which is approximately 24 percent of the demand for total credit, according to a recent SIDBI report (development of small industries in India).
The report stressed that, although the credit offer to the MSME has increased, the gap remains significant, as special in certain segments.
He said: “While it is evidenced a greater credit supply to the MSME, the study widely estimates that the sector still has a addressable credit gap of approximately 24 percent or 30 Lakh CRE.”
The services sector has a higher credit gap of around 27 percent, while the gap for MSME owned by women is equally higher in 35 percent.
He also pointed out that, in comparison, the male mipyme face a credit gap of around 20 percent. Many businesswomen still trust informal credit sources to meet their commercial needs.
Among the different types of companies, medium -sized companies face the highest gap with 29 percent, since they require more capital to expand operations. Micro and small businesses also face challenges to access enough funds.
At the commercial activity level, the report added that the MSMEs involved in trade face the largest credit gap in about 33 percent. This is mainly due to the fact that commercial businesses lack the guarantee necessary to obtain formal loans.
Despite the challenges of the thesis, Sidbi says that the Mipyme sector is well positioned to become one of the key drivers of the Indian economy as it advances towards the objective of ‘Viksit Bharat’.
The sector is seeing strong growth in the venture of women and companies focused on sustainability. The report mentioned that the growing formalization of MSME and a growing change towards digital loans is expected to close the credit gap over time.
However, he emphasized the need for specific policies initiatives to address gaps in segments such as services and companies led by women.
To further support the sector, MSMEs need help to improve access to market and productivity. Government support in areas such as digital adoption, skills development, labor and infrastructure availability will be essential for growth.
Posted on May 19, 2025