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Considering its enormous role in employment and revenue growth, the MSME sector is regarded as a cornerstone of the nation’s economy. A third of India’s GDP comes from the Micro, Small and Medium Enterprises (MSME) sector, which accounts for approximately 63 million MSMEs and about 30% of the country’s GDP. Owing to their service offering and technological advancements in the SME credit market, NBFCs have assisted MSME organizations in expanding their footprint in the economy. Here are the opinions of our sector experts on how NBFCs continue to be the primary catalyst for MSMEs’ growth momentum.
Hardika Shah, Founder and CEO, Kinara Capital said “The MSME sector is considered a pillar of the country’s economy due to its immense contribution to employment and income generation. At present, the 63 million MSMEs in India account for close to 30% of the country’s GDP. As the country moves towards becoming a $5 trillion economy, it is imperative that the biggest hurdle for MSMEs, which is access to formal credit, is resolved. That’s where last-mile NBFCs are making a difference by servicing niche credit demands, taking a different approach to credit assessment often without the requirement of property collateral. In the last financial year (FY22), NBFCs loans grew by more than 10% which was almost double of bank loans signaling the rapid demand for simplified access to credit.”
