The participating banks include Axis Bank, Dhanlaxmi Bank, Karnataka Bank, AU Small Finance Bank, and IndusInd Bank. This strategic collaboration is designed to help Micro, Small, and Medium Enterprises (MSMEs) secure easier access to formal credit at affordable rates.
High-Level Presence at the MoU Ceremony
The signing event was attended by Union Minister of MSME, Shri Jitan Ram Manjhi, and Secretary (MSME), Shri S.C.L. Das. The MoUs were exchanged between Shri Gaurav Gulati, Director (Finance) of NSIC, and senior officials from the partner banks.
Other dignitaries present included Ms. Mercy Epao, Joint Secretary (SME), Dr. S.S. Acharya, Chairman and Managing Director of NSIC, along with senior officials from the corporation and the banking sector.
Expanding Credit Outreach to MSMEs
The partnerships aim to extend handholding support to MSMEs, enabling them to connect with the formal financial system. With banks expanding their outreach, the initiative is expected to significantly improve credit penetration among micro and small enterprises.
According to NSIC, this arrangement will serve as a “force multiplier” in banks’ efforts to reach entrepreneurs in remote areas who often face challenges in obtaining institutional credit.
Why This Matters for MSMEs
MSMEs are a backbone of India’s economy, contributing nearly 30% to GDP and employing over 110 million people. However, many still struggle with limited access to affordable credit, often relying on informal lending sources with high interest rates.
By linking these enterprises to formal banking channels, the MoUs aim to reduce their cost of borrowing, improve business sustainability, and encourage growth. This also aligns with the government’s vision under Atmanirbhar Bharat to promote self-reliance through strong small business ecosystems.
How the MSME Credit Facilitation Program Works
The program acts as a bridge between MSMEs and partner banks. NSIC assists businesses in preparing documentation, meeting compliance requirements, and presenting viable proposals to banks. The aim is to streamline the approval process and minimise delays.
Through its network of offices across India, NSIC will also monitor and support beneficiaries in utilising the credit effectively for business expansion, technology upgrades, and working capital needs.
Looking Ahead
The NSIC expects the new collaborations to open doors for thousands of enterprises over the coming year. With focused efforts from banks to “reach the last mile”, entrepreneurs in semi-urban and rural areas could benefit significantly.
Industry experts believe that such public-private partnerships are crucial for bridging the MSME credit gap, which the International Finance Corporation estimates at over ₹20 lakh crore in India.
