FlexiLoans.com, an MSME-focused fintech NBFC, today released its MSME Pulse – Festive Edition FY27 projecting festive-season lending to hit a new high in 2026 supported by a sharper consumption cycle, a compressed festive calendar and rising digital commerce across non-metro markets.
The report projects the MSME lending opportunity for July–December 2026 at Rs 2.4–2.6 lakh crore, with the NBFC segment accounting for an estimated Rs 36,000 crore. It also projects the overall MSME credit book to cross Rs 50 lakh crore by December 2026, reflecting continued expansion in formal credit access and borrowing demand. India’s online festive GMV is projected to reach Rs 1.50–1.55 lakh crore in 2026, up 25% year-on-year, while festive shoppers are expected to rise to 180–185 million from 160 million in 2025.
The 2026 festive season is shaping up for stronger MSME demand, backed by 8.2% GDP growth, inflation remaining within the RBI’s target band and improving consumption
The Shift in MSME Lending Landscape
India’s MSME lending market is seeing a structural shift towards NBFCs, particularly in small-ticket and unsecured business lending (UBL). The UBL segment stood at Rs 9.7 lakh crore within the Rs 46.4 lakh crore MSME credit market in FY25, with NBFCs gaining 10 percentage points in share between FY22 and FY25, while PSBs lost 11 points. NBFCs now account for 46% of Rs 2–5 lakh, 45% of Rs 5–10 lakh and 54% of Rs 10–25 lakh business loans, underscoring their growing dominance in the small-ticket credit segment. Individual entrepreneurs are driving a growing share of credit balances, origination is increasingly moving through digital platforms and embedded finance partnerships, and underwriting is evolving beyond bureau-only assessment to incorporate GST returns, bank-statement analytics and alternative repayment signals.
FlexiLoans projects robust disbursements
The company expects around 20 lakh loan applications and projected disbursements of Rs 1,700–1,900 crore during July–December 2026. The peak festive month, October, is projected to generate more than Rs 350 crore of disbursements. Cumulative disbursements are expected to reach approximately Rs 14,500 crore by December 2026. It serves more than 70,000 MSMEs in 19,000+ pin codes across India and has championed access to capital for underserved Tier 2 and Tier 3 markets by leveraging alternative data sources.
Tier 2–4 markets remain the centre of credit demand
The growth opportunity is increasingly shifting beyond India's largest cities with origination growing fastest in Uttar Pradesh (+32.3%), Andhra Pradesh (+32.1%), Telangana (+28.0%) and Tamil Nadu (+21.3%). Beyond the top 100 cities, credit expanded at a 21.6% CAGR between 2023 and 2026. Yet, only 41% of India’s 8.7 crore registered MSMEs have accessed formal credit, leaving a Rs 25 lakh crore gap. It expects 62–65% of FlexiLoans' borrowers to come from Tier 2–4 markets
Deepak Jain, Co-founder, FlexiLoans.com, said, “The 2026 festive cycle is shaping up differently from previous years. Consumption is already underway, digital commerce is expanding deeper into non-metro markets and MSMEs need to finance inventory ahead of the demand they expect to capture. NBFCs have become the primary engine for small-ticket, unsecured MSME credit. At FlexiLoans, our focus remains on using technology and data-led underwriting to make this capital accessible to MSMEs across India.”
The trends highlighted in the MSME Pulse – Festive Edition FY27 report are supported by independent industry data. CRIF High Mark's own MSME credit tracker, released this week, puts India's overall MSME credit portfolio at Rs 47.4 lakh crore as of June 2026 — up 12.5% year-on-year. CareEdge Ratings has also separately projected that NBFCs' MSME AUM will cross Rs 5.3 lakh crore in FY26, having grown at a 32% CAGR between FY21 and FY24 against 20.9% for private banks and 10.4% for public sector banks.
The firm operates in a large white space, addressing the estimated $250 billion unmet credit demand from India's 60+ million MSMEs. Its strong moats in origination, AI/ML-backed risk-pricing, and fully automated scorecards allow it to approve 30-40% more customers while maintaining industry-leading low credit and collection costs.
