MSME Loans

The development assumes significance as MSMEs accounted for 50% of the central government’s ₹2.30 trillion procurement of goods and services in FY26. As per rules, MSMEs that get a government order valued at over ₹1,00,000 must furnish a performance bank guarantee worth 3-10% of the project value.

The microlender's last equity fundraise was more than two years ago when Piramal Alternatives Trust, a wholly owned subsidiary of Piramal Enterprises, acquired a 10.4% stake in Annapurna for ₹300 crore.

A sharp contraction in lending and applications under the PMEGP in FY26 signals weakening momentum in credit support for small enterprises, with potential implications for job creation.

Strong sales mask weak financial discipline, from poor cash flow tracking to GST lapses, leaving many small businesses locked out of credit.

While the immediate impact of the ongoing war in West Asia remains limited, non-bank lenders believe the real risk lies in a prolonged conflict, which could trigger second-order effects across inflation, demand and credit cycles.

More time to repay loans before SMA label kicks in, a waiver of penalties, and a digital platform to smoothen debt restructuring - That's what the Union budget may have in store for MSMEs struggling to repay debt.

While the scheme supported around 100,000 projects in each of the last four years, it has aided only 12,707 of them this year.