India's MSME sector faces a formal credit gap of around ₹60 trillion, with existing institutional channels meeting only 30-40% of the debt demand of smaller enterprises, according to a report by Bain & Company-NPCI Bharat BillPay Ltd. This significant gap highlights the challenges faced by micro, small and medium enterprises in accessing formal credit facilities. The report was released at the Global Fintech Fest, emphasizing the urgent need for digital solutions to address this funding shortfall.
The report identifies a centralised interoperable digital layer as a key solution to bridge the MSME credit gap. As reported by Bain & Company-NPCI Bharat BillPay Ltd, this digital ecosystem would seamlessly connect key economic stakeholders including businesses, banks, financiers, payment providers and public systems. The implementation would digitise the entire order-to-cash process while maintaining minimal disruption to existing systems, with the potential to automate reconciliation across over 20 crore monthly GST e-invoices. The system could help address the MSME sector's biggest constraints - the difficulty of turning sales into cash and cash flows into credit.
India's business sector accounts for more than ₹130 trillion in economic activity and around 45% of the country's gross value added (GVA), according to the report. The digital infrastructure could enable cash-flow-based underwriting alongside traditional collateral-based lending, transforming buyer-confirmed invoices into financeable records. This comprehensive approach would unlock productivity across the country's formal business sector while improving access to credit for underserved MSMEs.
According to industry estimates, the total value of pending payments to micro, small and medium enterprises in India is estimated at around ₹8 trillion. As reported by the study, a single, verified digital platform could address discrepancies that delay payments, including mismatched invoice details, unconfirmed deliveries, and unverified purchase orders. The report suggests that adding artificial intelligence and smart data tools to this digital system could automate the entire trade lifecycle through cash-flow intelligence, dynamic risk scoring, and open-market intelligence.
Commerce Secretary Rajesh Agarwal called for taking steps to bridge trade finance gaps, noting that the global trade finance gap is estimated at $2.5 trillion. Speaking at the BRICS Business Forum 2026, he emphasized the need to enable exporters to access affordable working capital based on confirmed orders and reliable payment records. The Jaipur consensus, adopted at the 16th BRICS trade ministers' meeting in August 2026, focuses on easing trade-finance constraints for MSMEs and strengthening global value chains through BRICS Connect and enhanced B2B partnerships.
