MSME Lending Financial Institutes

The MSME lending market is experiencing robust growth, driven by increasing formalization, a supportive regulatory environment, and rapid digitalization. Financial institutions are tapping into a significant credit gap, with the total debt demand far exceeding the current formal supply, presenting a substantial opportunity for growth. Non-Banking Financial Companies (NBFCs) and private banks are leading this expansion by leveraging technology and flexible lending models, especially to serve the "new-to-credit" (NTC) segment. The overall credit quality in the sector has improved, with lower delinquency rates compared to previous years, reflecting a healthier underlying performance among MSMEs.