Credit for growth: Enhanced credit flow to boost MSME investment, growth

Since credit is growing at a healthy pace, lenders must properly evaluate businesses before extending credit

At the recently held National MSME Cluster Outreach Programme, Union Finance Minister Nirmala Sitharaman announced measures expected to help micro, small, and medium enterprises (MSMEs). The government has increased the lending target for scheduled commercial banks and non-banking financial companies (NBFCs) to MSMEs this financial year by Rs 1.54 trillion, aiming for a credit flow of Rs 5.75 trillion in 2024-25. The target has subsequently increased to Rs 6.21 trillion and Rs 7 trillion for 2025-26 and 2026-27, respectively. In this context, public-sector banks (PSBs) are expected to take the lead in lending to MSMEs because growth in outstanding loans