Sidbi said in a report that the credit gap in the sector is Rs 3 million, with a higher gap in some pockets within the sector, such as services and MSMES owned by women.
The report, titled “Understanding the MSME Department of India: Progress and Challenges”, states that sectors such as Off-Shelf Clothing (RMG), grocery retailers, food processing and IT/ITES have high credit gaps and require interventions specifically designed for them.
In this report, Sidbi surveyed 2,097 MSMEs in 19 areas of manufacturing, services and trading.
The report highlights the high borrowing of micro-enterprises from informal sources, with 3% and 2% respectively, at 12%.
It noted that while 90% of respondents reported accepting digital payments, only 18% took advantage of digital loans. The report said formalization still presents a challenge, with “35% of respondents still not registered, reflecting a lack of awareness and fear of censorship”.
