Mr. Sabir Nasir Mujawar

International Journal of Scientific Research & Engineering Trends • 2025

Abstract

Micro, Small, and Medium Enterprises (MSMEs) have emerged as a powerful force driving credit growth in the Indian banking sector, overtaking traditional retail lending segments. This research investigates the shifting dynamics of credit disbursement between MSMEs and retail loans using secondary data from RBI reports and case insights from Economic Times articles (2025). With improved asset quality and government-backed credit guarantee schemes such as CGFMU and ECLGS, banks are increasingly investing in MSME lending. This paper explores how digital infrastructure (e.g., TReDS platforms), fintech collaborations, and monetary policies have catalyzed MSME credit expansion. Through a case study and trend analysis of credit disbursal data from FY 2022–25, we examine sectoral credit performance, NPA levels, and structural challenges. The study concludes with strategic recommendations to sustain credit quality and unlock further growth in India’s MSME sector.