MSME Finance market of India will continue to grow at a considerable pace in the next few years owing to Government of India’s financial inclusion, administrative reforms, rising awareness among entrepreneurs and inclining competition in the country. The market is predicted to grow at a CAGR of ~% from FY’2016-FY’2020 and is expected to reach INR ~ million by FY’2020. Along with government initiative, private sector financial institutions such as private banks, NBFCs and MFIs will look forward to provide more digitization of credit facilities. The market is expected to be driven by increasing role of government, rising number of small startups and presence of a large number of players in the MSME market offering different schemes to people/ entrepreneurs. The increasing expenditure on R&D by major players aiming to explore the possibility of innovative promotional methods which are cost-effective is expected to boost the market growth in the future.
Furthermore, by putting an emphasis on enhancing its production capabilities through programs such as Make-in-India and Skill India, the government can create an environment which is conducive for growth of MSME finance market. In the coming years, MSMEs are expected to use the online mode of loan application, which will comprise of application, verification and finalization, more than the conventional on-site applications which would further expand the market for MSME finance market.
“Rising government initiatives, increasing awareness among Entrepreneurs, augmenting financial infrastructure support to MSME and adoption of online mode of loan application are anticipated to give a boost to India MSME Finance market. Poor accountability of staffs in Banks and other institutions, collateral requirement and inadequate penetration of formal finance are few of the major challenges which will affect the growth of this industry in the future”, according to the Research Analyst, Ken Research.
The report titled "India MSME Finance Market Outlook to 2020 - Driven by Government’s Financial Inclusion Agenda and Newfound Profitability in Segment" provides detailed overview of MSME financing and helps readers to identify the ongoing trends in the industry and anticipated growth in future depending upon changing industry dynamics in coming years. The report will be useful for private and public banks, Non Bank Finance Companies (NBFCs), MFIs, Fintechs and other stakeholders to align their market centric strategies according to ongoing and expected trends in the future.