Rapid Fire
Gaps in MSME Sector
- 15 May 2025
- 2 min read
The report titled “Understanding the Indian MSME Sector: Progress and Challenges” by the Small Industries Development Bank of India (SIDBI) identifies lack of timely and adequate credit as a primary challenge for Micro, Small and Medium Enterprises (MSMEs) in India.
- Key Findings: Informal borrowing remains prevalent, with 12% of micro enterprises, 3% of small industries, and 2% of MSMEs overall still relying on informal lending sources.
- The MSME sector faces an addressable credit gap of 24%, amounting to nearly Rs 30 lakh crore, with the gap rising to 27% in the services sector and reaching 35% for women-owned MSMEs.
- 25% of MSMEs face a skilled manpower shortage, especially in defence, garments, hotels, and sanitaryware sectors.
- SIDBI: It is a statutory body established under the SIDBI Act, 1989, and serves as the principal financial institution for the promotion, financing, and development of the MSME sector in India.
- SIDBI, headquartered in Lucknow, Uttar Pradesh, is a wholly-owned subsidiary of the Government of India.
- Current Landscape of MSMEs in India: MSMEs now contribute 30.1% to India’s Gross Value Added (GVA) (2022–23), up from 27.3% in 2020–21.
- Exports from MSMEs jumped from Rs 3.95 lakh crore (2020–21) to Rs 12.39 lakh crore (2024–25), with their share in total exports rising to 45.79% by 2024.
| Read More: Union Budget 2025-26 Measures to Boost MSMEs |
