MSME Lending Surges as Banks Accelerate Credit Expansion
Small business financing grows sharply amid stronger industrial activity and financial inclusion efforts
NEW DELHI, May 30: Lending to micro, small and medium enterprises (MSMEs) registered strong growth during FY26, reflecting increased financial support for the sector and expanding business activity across the country.
According to the RBI’s Annual Report, credit growth to MSMEs rose by 23.5 per cent during the financial year, significantly outpacing overall banking sector expansion. The increase was driven by policy measures aimed at improving access to finance and strengthening financial inclusion.
The report noted that industrial credit remained healthy, particularly in infrastructure, engineering, chemicals and metal related industries. Lending to the services sector also maintained double digit growth, supported by trade, commercial real estate and non-banking financial companies.
The central bank said sustained credit flow to productive sectors is expected to support investment, employment generation and economic growth in the coming quarters.
