Despite India's advanced digital payments ecosystem, only 14% of micro, small and medium enterprises (MSMEs) have access to formal credit, according to Deloitte's latest State of Financial Services in India report. The report emphasized that these shortfalls represent 'not marginal shortfalls -- they are fundamental indicators of the critical need for deepening financial inclusion, and achieving broader economic growth'. As reported by ANI, these shortfalls leave the majority of MSMEs, mostly micro-enterprises, dependent on informal, usurious financing sources, highlighting the urgent need for structural reforms to improve credit delivery and expand financial literacy across the country.
According to the Deloitte report, India's MSME credit gap stood at around ₹25 lakh crore as of March 2025. However, based on the sector's contribution to GDP and a healthy credit-to-GDP ratio, the formal credit gap could be 'well over ₹50 lakh crore'. The report noted that achieving higher growth will require stronger financial inclusion and better access to credit for underserved businesses, as India remains one of the world's fastest-growing major economies. As per ANI, the report comes at a time when India is positioning its financial sector to support long-term economic expansion, underscoring the critical importance of addressing these credit gaps.
India has made significant progress in expanding financial access, with around 89% of Indian adults now having a financial account, as reported by ANI. The Unified Payments Interface (UPI) processes more than 20 billion transactions every month and accounts for nearly half of global real-time payment volumes. Despite these gains, major inclusion gaps persist, with about 16% of bank accounts remaining inactive and only 15% of Indian adults accessing formal credit, compared with a global average of 24%. These figures underscore the need for structural reforms to improve credit delivery and expand financial literacy across the country.
According to the Deloitte report, insurance penetration remains low at 3.7% of GDP, roughly half the global average, as reported by news agency ANI. The report highlighted that only 15% of Indian adults access formal credit, while the global average stands at 24%. These figures underscore the need for structural reforms to improve credit delivery and expand financial literacy across the country. The report emphasized that addressing these structural challenges by improving credit access, expanding insurance coverage, strengthening financial literacy and reducing digital access gaps will be critical to ensure that financial inclusion translates into broader economic participation, financial resilience and sustainable growth.
The Deloitte report called for renewed policy focus to improve credit delivery and address structural bottlenecks restricting financial inclusion. The report emphasized the need to scale cash-flow-based MSME lending through AA (Account Aggregator) framework, stating that credit should become 'ridiculously cheap and easy' for small business owners. As per ANI, the report outlined that the need to scale cash-flow-based MSME lending through AA (Account Aggregator) framework means that credit should and can become ridiculously cheap and easy for every small business owner - the small supplier, the shopkeeper, the contractor, the artisan and various others. The report added that deeper inclusion across semi-urban, rural and underserved segments can also create new demand drivers for the economy while strengthening resilience against external shocks.
