Sector overview

The enterprises sector (consisting small businesses also) in India consists of 26 million enterprises. These contribute over 45% to India’s manufacturing output by value, as per the Ministry of MSME’s statistics. It has been growing at a faster pace of over 11% compared to the rest of the industry and is a priority sector for development.

Source:Ministry of MSME Annual Reports

Out of the 26 million enterprises (including small businesses), 94% are unregistered. These enterprises have minimal records making it more difficult for them to establish their income and expenditure track record, for accessing capital from formal sources. Access to finance continues to be a major challenge to the sector.

While the lending has been registering a healthy growth year on year, as the statistics above indicate, there continues to be a large gap between the demand and supply, leading to a major portion of the sector not having required capital for effective development and growth.