The Micro, Small and Medium Enterprise sector is crucial to India’s economy.Although 95% of Micro, Small and Medium Enterprise units are informal in nature, the contribution of the sector to India’s GDP has been growing consistently at 11% per annum, higher than overall GDP growth of 7-8% . Poor infrastructure and inadequate market linkages are among key factors that have constrained the growth of the sector. However, lack of adequate and timely access to finance has continued to be the biggest challenge.

This study by Intellecap, commissioned by the International Finance Corporation (IFC) estimates the size of the MSME finance market in India, identifies challenges and opportunities for private sector participation and potential interventions that can promote activity in this market.