For over a decade, MSME (micro, small, and medium enterprise) finance conversation in India has centered on one word: access; digital lending, account aggregators, and goods and services tax (GST)-linked underwriting, all built to get more capital to more small businesses faster. It is tempting to conclude this problem is now largely solved. It isn’t. India’s addressable MSME credit gap stands at an estimated Rs 30 lakh crore. Of India’s 63.5 million Udyam-registered MSMEs, only 14-16% have access to formal credit, and a further Rs 10 lakh crore sits locked in delayed receivables at any given time, capital that exists on paper but is simply unavailable to the businesses that earned it. This is not a case of money waiting idle for somewhere to go. The capital is not there and closing that gap remains the sector’s first and foremost task.
Access is not the only problem
