Current Financing Landscape for MSMEs

MSME Sector in India

Part 16

Current Financing Landscape for MSMEs

One of the major challenge faced by the department of financial service in the path of mission mode implementation is Lack of supporting Infrastructure. Read more here

Exhibit 13: Current Financing Options Available

Current Financing Landscape for MSMEs

Overall Funding Demand and Gap for MSMEs

The overall finance gap in the MSME sector is estimated to be INR 20.9 trillion. The demand for finance form external sources is estimated to be INR 27.9 trillion, while the total finance channeled by formal sources is estimated to be INR 7 trillion. The overall finance (debt and equity) gap of INR 20.9 trillion is split into a debt gap of INR 19 trillion and an equity gap of INR 1.9 trillion. This gap largely remains unmet, with a significant share met through informal channels, which is often at higher cost than the institutional finance.

Overall Funding Demand and Gap for MSMEs

Exhibit 14: Current Funding Gap

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