Primer on MSME Financing

Kanakprabha Jethani & Timothy Lopes

Micro, Small and Medium Enterprises (MSMEs) have received a lot of attention from the government in recent times in terms of regulatory measures, reliefs and benefits. Consequently, the eligibility criteria and incentives offered to the MSME sector in terms of financing has been attracting the attention of businesses across the country. Additionally, with various schemes being introduced for revival and upliftment of MSMEs, banks and financial institutions have also started focusing on the MSME segment of borrowers.

This usually-overlooked segment of borrowers is now becoming the most targeted customer base, however, there are many uncertainties around the concept of MSME and the benefits associated with MSME financing.

Below we have listed some of the generally raised concerns in this regard and our response to the same.

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