Media365
Lack of access to “timely and adequate” credit and shortage of manpower are among the key challenges that Micro, Small and Medium-scale Enterprises (MSMEs) face, according to a Small Industries Development Bank of India (SIDBI) report titled “Understanding the Indian MSME Sector: Progress and Challenges”.
The report, which is based on a survey of 2,000 MSMEs in 19 sectors, says that despite comprehensive policy initiatives, MSMEs do not have access to adequate credit when they need it. About 3% of the total borrowings of small industries is from informal sources while the numbers stand at 2% for MSMEs and 12% for micro enterprises.
A press release said the study broadly estimates “the sector still has an addressable credit gap of about 24% or ₹30 lakh crore.” The gap is higher in the services sector at 27% and is estimated to be higher at 35% for women-owned MSMEs too, indicating a need for targeted policy actions, the release added.
More number of MSMEs are likely to adopt digital tools for credit access when supported by platforms such as UPI as 18% of MSMEs use digital lending platforms and 90% accept digital payments.
Around a fourth of the surveyed MSMEs cited lack of skilled manpower as one of their major challenges. The shortage is high in defence equipment, readymade garments, hotel sectors, and tiles and sanitaryware, the report said.
Published – May 13, 2025 09:07 pm IST
