India’s Largest Lender SBI On MSME Lending Strategy & NBFCs’ Role In Credit

At the CII's Financing 3.0 summit, SBI Chairman C S Setty addresses the pivotal role and challenges of channelling lending momentum toward MSMEs. He identifies the lack of formalization in the sector as a major barrier. While credit lenders are available, C S Setty points out that MSMEs struggle with credit absorption. However, advancements in digitalization and initiatives like GST have led to increased formalization, allowing banks to develop credit models and offer formal credit to MSMEs—something previously unattainable. He emphasizes that formalization remains the biggest hurdle in MSME lending, alongside other challenges, and stresses the importance of credit absorption for businesses looking to grow and scale. Additionally, SBI Chief highlights the critical role NBFCs play in driving credit growth within the sector.