MSME Credit Target FY26: PSBs to Reach ₹17.31 Trillion
Why in the news
The government fixed an ambitious credit goal for state-run lenders to support small businesses, even as bankers worry about bad loans.
Key facts
- FY26 target: ₹17.31 trillion MSME credit outstanding across PSBs.
- Growth needed: 19.5% over the FY25 expected figure of ₹14.49 trillion.
- Meeting: 24 April 2025 with industry bodies, banks and regional rural banks.
- Agenda: grievance redressal, Special Mention Accounts, and Budget FY26 credit cards for micro-enterprises.
Bank-wise FY26 targets (₹ trillion)
| Bank | Target |
|---|---|
| State Bank of India | 4.82 (23% growth) |
| Canara Bank | 1.84 |
| Bank of Baroda | 1.77 |
| Punjab National Bank | 1.58 (23.4% growth) |
| Bank of India | 1.26 |
| Central Bank of India | 0.75 |
| Bank of Maharashtra | 0.58 |
Support schemes
- Credit Guarantee Scheme: collateral-free loans up to ₹5 crore with 90% guarantee cover.
- PMEGP: backs setting up new micro-enterprises.
- PM Vishwakarma Yojana: develops traditional crafts and skills.
- PMMY (Mudra): loans to small businesses to encourage entrepreneurship.
Concerns
- Bankers fear rising bad loans in the segment, though credit guarantees help.
- Asset quality has improved: MSME GNPA ratio went from 11% (FY20) to 4% (FY24).
- Banking performance needs careful monitoring to keep growth sustainable.
Exam angle
- Target for FY26: ₹17.31 trillion.
- CGS cover: 90%, up to ₹5 crore.
- Related term: Special Mention Accounts (SMAs).