New Delhi, Jan 29 (PTI) Flagging that around Rs 8.1 lakh crore of delayed payment is restricting the growth of the country's MSMEs, the Economic Survey has called for innovative measures, including cash-flow-based lending, to ensure credit access to micro enterprises and first-time borrowers.
Despite expanding credit footprints and rising digital integration, access to formal credit remains a binding constraint for many micro enterprises due to limited collateral and documentation readiness, stated the Economic Survey 2025-26 tabled in Parliament on Thursday.
According to the Survey, women-owned micro, small and medium enterprises (MSMEs) in particular, account for a small fraction of commercial credit, though formalisation under 'Udyam' and targeted credit guidelines are gradually addressing this gap. Furthermore, MSME credit has maintained a positive trajectory in recent times, bolstered by several government interventions aimed at enhancing credit flow to the sector.
It flagged operational challenges such as delayed payments, observing that they affect liquidity, especially for micro suppliers.
The Survey suggested that accelerating digital lending partnerships may also channel timely and affordable finance to a wider base of enterprises.
"The persistence of delayed payments remains a critical challenge for the MSME sector, with an estimated Rs 8.1 lakh crore locked in delayed payments, impacting working capital and restricting growth. Overall, the MSME sector is well-positioned to harness the current momentum in the manufacturing sector," said the Survey.
In order to continue the momentum, innovative measures, including cash-flow-based lending, should be expanded significantly to encourage formal credit access to micro and even first-time borrowers, it said.
Under the cash-flow-based lending, loans are sanctioned based on the estimated or previous revenue patterns of an enterprise.