The report, based on a primary survey of over 2,000 MSMEs across 19 industries, reveals that while digital adoption is gaining momentum, access to timely and adequate credit continues to be a significant bottleneck, particularly for micro enterprises and women-led businesses.
According to the study, 18% of MSMEs now use digital lending platforms, reflecting a growing shift towards technology-enabled credit solutions. Additionally, with 90% of MSMEs accepting digital payments, the sector is embracing digital tools more broadly, laying the groundwork for improved credit access in the future. This trend is being driven by the expansion of platforms like UPI, which are increasingly seen as enablers of financial inclusion.
However, despite these advances, the report estimates that India’s MSME sector still faces a substantial credit gap of ₹30 lakh crore, representing nearly 24% of the total addressable demand. The shortfall is especially acute in the services sector (27%) and among women-owned MSMEs (35%), signalling the need for more targeted and inclusive lending policies.
The report also highlights that while informal borrowing is minimal among small and medium enterprises (3% and 2% respectively), it remains relatively high for micro enterprises at 12%, underlining their continued reliance on non-institutional sources of finance.
SIDBI’s findings point to the urgent need to scale digital lending infrastructure and tailor financial products to the needs of underserved segments, especially women entrepreneurs and micro businesses.