As of FY24, MSMEs' share in GDP stood at 31 per cent, unchanged since FY20, while contribution to exports was 45.7 per cent, down from 49.7 per cent as of FY20.
As per Udyam registration details, 6.75 crore enterprises registered with the MSME Ministry as MSMEs have so far reported 29.3 crore jobs. (Source: AI Image)
MSMEs are set to play a central role in India’s 2047 mission with their contribution to the gross domestic product (GDP) projected to reach 50 per cent by 2030, employing nearly 150 million people and accounting for 60 per cent of the country's exports, said the FIBAC 2025 report by BCG and FICCI.
As of FY24, MSME share in GDP stood at 31 per cent, unchanged since FY20, while contribution to exports was 45.7 per cent as of FY24, down from 49.7 per cent as of FY20, as per the data from the MSME Ministry. As per Udyam registration details, 6.75 crore enterprises registered with the MSME Ministry as MSMEs have so far reported 29.3 crore jobs.
Fueling this momentum, new-to-credit (NTC) borrowers in the MSME segment have grown steadily in recent years, aided by formalisation measures and stronger institutional support.
The report noted that public sector banks (PSUs) are spearheading NTC lending to MSMEs, increasing their share by 9 percentage points (pp) to 58 per cent in FY25, compared with 49 per cent in FY19. In contrast, private banks and non-banking financial companies (NBFCs) have scaled back their presence in this segment, with their shares declining by 12 pp and 8 pp, respectively over the same period.
Excluding very small exposure borrowers, PSU banks again lead the pack with a 7 pp gain, while private banks and NBFCs posted drops of 7 pp and 6 pp respectively. The MSME borrower base today is pegged at 6.6–6.8 crore, with a bureau footprint of 1.7–2.1 crore and nearly 1 crore active borrowers.
“PSU Banks are leading the way in NTC additions (driven by policy mandates and strategic inclusion push), while private Banks and NBFCs adopt a more cautious stance towards NTC MSME borrowers,” the report said.
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Despite the scale of their contribution, access to formal credit remains a bottleneck for many MSMEs. Reforms such as Udyam registration, GST, and proliferation of digital payments (UPI, QR codes) have enriched the MSME data footprint.
Coupled with credit guarantee schemes like CGTMSE and CGFMU, these initiatives have nudged more enterprises into the formal financial system, according to the report.
Analysts point out that as MSMEs expand their economic footprint, financial inclusion in this sector could prove highly lucrative for lenders. “Lenders have an opportunity. If done well, MSME lending can be a very profitable segment,” the report noted.
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