New Delhi : The MSME (Micro, Small and Medium Enterprises) sector is facing an addressable credit gap of around Rs 30 lakh crore, which is about 24 per cent of the total credit demand, according to a recent report by SIDBI (Small Industries Development Bank of India). The report highlighted that even though credit supply to MSMEs has increased, the gap remains significant, especially in certain segments.
It said, “While an increased credit supply to MSMEs is in evidence, the study broadly estimates that the sector still has an addressable credit gap of about 24 per cent or approx. Rs 30 lakh crore”. The services sector has a higher credit gap of around 27 per cent, while the gap for women-owned MSMEs is even higher at 35 per cent. It also noted that in comparison, male-owned MSMEs face a credit gap of around 20 per cent. Many women entrepreneurs still rely on informal sources of credit to meet their business needs.
Among different types of enterprises, medium-sized businesses face the highest gap at 29 per cent as they require more capital to scale up operations. Micro and small enterprises also face challenges in accessing sufficient funds.
At the business activity level, the report added that the MSMEs involved in trading face the largest credit gap at around 33 per cent. This is mainly because trading businesses often lack the collateral needed to get formal loans.