MSME Credit Expands Through SIDBI Expansion and ECLGS 5.0

Ø SIDBI Expands Nationwide Presence with 71 New Branches; Direct Credit Portfolio Grows 36.8% Y-oY

Ø ECLGS 5.0 Envisages ₹2.55 Lakh Crore Additional Credit With up to 100% Guarantee Coverage for Eligible MSMEs

· SIDBI Expands Reach: SIDBI has opened 71 new branches across India between 1 April 2024 and 29 July 2026 to serve major MSME clusters and improve direct credit access.

· Direct Credit Growth: SIDBI's direct credit outstanding portfolio increased to ₹51,687 crore as of 31 March 2026, registering a 36.8% year-on-year growth from ₹37,781 crore.

· Refinance Support: SIDBI's refinance portfolio rose to ₹4,50,571 crore as of 31 March 2026, reflecting 16.9% year-on-year growth, helping Primary Lending Institutions expand MSME lending.

· Co-Lending Initiatives: SIDBI launched co-lending arrangements with NBFCs and Regional Rural Banks (RRBs) to provide affordable credit and improve financial access for underserved and first-time MSME borrowers.

· Prayaas Scheme: Introduced to provide affordable credit to informal micro-entrepreneurs and micro-enterprises, with a special focus on women and economically weaker entrepreneurs.

· GST Sahay App: SIDBI launched the GST Sahay App to offer invoice-based, cash flow-backed instant small-value loans to micro enterprises using GST and digital trade data.

· ECLGS 5.0 Introduced: The Government launched Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 in May 2026 to enhance credit availability for MSMEs.

· Additional Credit Support: Eligible MSMEs can avail additional credit of up to 20% of their peak fund-based working capital outstanding during the fourth quarter of FY 2025–26.

· 100% Guarantee Coverage: ECLGS 5.0 provides 100% government guarantee to Member Lending Institutions (MLIs) for eligible MSME loans. For scheduled passenger airlines, the guarantee coverage is 90%.

· ₹2.55 Lakh Crore Credit Target: The scheme aims to facilitate ₹2.55 lakh crore in additional credit for MSMEs, non-MSMEs and scheduled passenger airlines.

· Government Focus: The initiatives are aimed at improving financial inclusion, credit access, ease of doing business, and growth of India's MSME sector.

[ABS News Service/05.08.2026]

Some major initiatives have been undertaken by Small Industries Development Bank of India (SIDBI) during the last five years to improve the flow of credit to Micro, Small and Medium Enterprises (MSMEs) across the country.

These include the following initiatives:

i. Subsequent to Union Budget Announcement FY 2024-25, SIDBI has opened 71 new branches across India from 01.04.2024 to 29.07.2026 to expand its reach to serve major MSME clusters and provide direct credit to MSMEs.

ii. As on March 31, 2026, SIDBI’s direct credit outstanding portfolio stands at ₹ 51,687 crores, as against ₹ 37,781 crores as on 31 March, 2025, registering a Y-o-Y growth of 36.8%.

iii. The Bank also provides refinance assistance to augment resources of Primary Lending Institutions (PLIs) to increase their flow of credit to MSMEs. As on March 31, 2026, SIDBI’s refinance outstanding portfolio stands at ₹ 4,50,571 crore, as against ₹ 3,85,327 crore as on 31 March, 2025, registering a Y-o-Y growth of 16.9%.

iv. SIDBI has launched a product on co-lending arrangement with Non-Banking Financial Companies (NBFCs) to provide affordable credit to smaller MSMEs, especially new borrowers, as part of its effort to reach underserved/ unserved MSMEs. During FY 202526, the Bank initiated co-lending arrangements with Regional Rural Banks (RRBs) to strengthen credit delivery and broaden financial access in underserved and untapped areas.

v. Prayaas Scheme has been launched by SIDBI to facilitate access to affordable credit to informal micro-entrepreneurs/ micro-enterprises (IMEs), especially women and poor.

vi. SIDBI has launched a GST Sahay app for ‘on tap’ invoice-based (cash flow based) small value credit to micro enterprises using trade data and digital frameworks.

The Government has introduced Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 in May, 2026. Under the scheme, MSMEs are eligible for additional credit up to 20% of the peak fund-based working capital outstanding during the fourth quarter of FY 2025–26.

The scheme provides 100% guarantee coverage to Member Lending Institutions (MLIs) towards the amount in default for such additional credit facility extended to the eligible MSME borrowers. For the scheduled passenger airlines, the guarantee coverage is 90%.

However, the scheduled passenger airlines are eligible for additional credit up to 100% of the total peak credit outstanding (both fund-based and non-fund-based) during the fourth quarter of FY 2025-26. Under the scheme, additional credit flow of ₹ 2,55,000 crore is envisaged for MSMEs, non-MSMEs and scheduled passenger airlines.

This information was given by Minister of State in the Ministry of Finance Pankaj Chaudhary in Rajya Sabha on 4 July, 2026.