| Year | MSME accounts | Outstanding loans |
| 2022 | 21.3 million | ₹22.6 lakh crore |
| 2023 | 25.7 million | ₹27.3 lakh crore |
| 2024 | 24.5 million | ₹31.3 lakh crore |
Interestingly, the number of borrowers fell while the amount lent increased. The number of MSMEs that received loans in FY2025 fell by over 1.7 million to 24.5 million, while the outstanding loans increased by 14.8% to ₹31.3 lakh crore, indicating that the new loans largely went to existing borrowers.
The weighted average lending rate (WALR) for fresh and outstanding loans to MSMEs fell only marginally. WALR for fresh loans to MSMEs was at 9.69%, compared to 9.99% in March 2024. For all outstanding loans, the lending rate was 10.1% compared to 10.31% a year earlier.
However, the fall in lending rate for MSMEs, 30 basis points, was sharper than those of the new loans to large companies that saw a weighted average reduction of just 6 basis points.
Policy push hasn’t helped
In June 2024, the RBI set a 14-day deadline for banks to decide on loan applications for loan requests up to ₹25 lakh. The lenders were also told to expressly state the reason for rejections.
Last year’s budget provided for credit guarantee schemes, in-house assessment mechanisms by public sector banks, a government-backed fund for emergencies, easier eligibility for online bill discounting, and guidelines for cluster financing to name a few measures taken by the government. And yet, the total credit to MSMEs slowed down in FY25 instead of gaining momentum.
In the latest budget released in Feb 2025, Finance Minister Nirmala Sitharaman announced 10 lakh credit cards with a limit of ₹5 lakh each for micro enterprises registered in the Udyam portal.
(Edited by : Sriram Iyer)
First Published: May 29, 2025 3:14 PM IST
