Top News

New delhi� New Delhi: �
There are some structural changes in the Indian debt market, where the loan of micro, small and medium enterprises (MSME) has reverse the overall trends of debt growth with an increase in bank credit increase. The loan supply has seen an increase in the loan supply to the current borrowers, the balance sheet of the MSME sector has seen significant improvement in the balance sheet – which has been measured for 90 to 120 days of measured (DPD). And has been reported as ‘cheap’, which has come down to a five -year low to 1.8 percent.

According to Dr. Soumya Kanti Ghosh, Chief Economic Advisor, Group of State Bank of India, this improvement between those who take loans ranging from Rs 50 lakh to Rs 50 crore shows a decline of 35 basis points as compared to the previous year. The definition of the MSME sector has been changed, for example, the turnover limit for medium enterprises has been increased to Rs 500 crore. Ghosh has mentioned in the report that thus, MSME debt growth can be increased even further.

The formalization of MSME with the help of URN seeding is giving necessary boost to MSME loan increase. Enterprise Registration Number (URN) is a permanent identification number for businesses that want to register themselves under MSME definition and get a guarantee cover. By June 27, a total of 2.72 crore has been registered through the enterprise assist platform.

“The government has taken a big initiative by providing better guarantee cover to various category MSME borrowers – raising the CGTMSE cover from Rs 5 crore to Rs 10 crore, mutual credit guarantee scheme for MSME manufacturing sector (for loans up to Rs 100 crore), Credit guarantee cover for loans to startups to startups from Rs 10 crore, and 20 crore rupees for Rs 20 crore, and 20 crore rupees for exporters. To introduce the credit guarantee cover for the loan.

The Indian industry has made significant improvements in its balance sheet and has increased its cash holding. In the last two years (FY 2024 and FY 2025), cash and bank balance of Indian companies increased by about 18–19 percent. The major areas where cash holding has been recorded include IT, automobiles, refineries, electricity, pharma etc. The Indian industry’s cash and bank balance, except BFSI, is estimated to be around Rs 13.5 lakh crore in FY 2025. Thus, according to SBI report, cash accumulation is sufficient for expansion plans.