The Reserve Bank of India is stepping up its support for MSME credit access in India, RBI Governor Sanjay Malhotra announced at the International MSME Day 2026 celebrations in Kochi, Kerala, on June 22, 2026. MSMEs collectively contribute 31% of India’s GDP, employ over 32 crore people, and account for nearly half of merchandise exports. Therefore, the RBI views this sector as central to achieving Viksit Bharat.
Key RBI Policy Measures for MSME Credit Access
The RBI has introduced several measures to improve MSME credit access in India. First, it doubled the collateral-free loan limit for micro and small enterprises from ₹10 lakh to ₹20 lakh, extendable to ₹25 lakh for businesses with a strong track record. Additionally, the CGTMSE guarantee scheme now carries zero risk weight for capital charges, encouraging banks to lend more confidently to collateral-deficient businesses.
The Account Aggregator framework has already facilitated lending of ₹3.5 lakh crore in FY 2025-26. Meanwhile, the Trade Receivables Discounting System (TReDS) allows MSMEs to convert invoices into immediate liquidity. The RBI also recently banned prepayment charges on floating-rate MSME loans, removing a key financial burden for small borrowers.
As a result of these combined efforts, total bank credit to MSMEs reached ₹36.79 lakh crore as of December 31, 2025. This represents a healthy CAGR of around 15% over the past five years, outpacing overall bank credit growth of 13.7%.
ULI and What This Means for MSME Borrowers
The Governor highlighted the Unified Lending Interface (ULI) as a transformative tool for MSME credit access in India. ULI pulls together GST filings, bank statements, and land records through a single consent-based digital interface. For example, a business with limited credit history but strong cash flows can now get assessed quickly and fairly. The Governor compared ULI’s potential impact to how UPI revolutionised digital payments.
The RBI also urged MSMEs to register on the Udyam Registration Certificate (URC) portal, which is free and fully online. However, only registered units can access key government scheme benefits. The Governor encouraged entrepreneurs to actively use TReDS, ULI, and the Account Aggregator framework to grow sustainably and build lender trust through financial discipline and digital adoption.
For more details, read the full RBI Governor speech on MSME financing.
Source: RBI Speeches
