SMALL IS BEAUTIFUL. Take India’s micro, small, and medium-sized enterprises (MSMEs) for instance. They play a crucial role in India’s economic growth, often attributed to large conglomerates and corporations. These MSMEs—currently more than 60 million—are the crucial backbone of the Indian economy, generating thousands of jobs, fostering innovation and entrepreneurship, and contributing nearly 45% to India’s exports and 30% to the gross domestic product (GDP).
Despite playing a pivotal role in the country’s development, these firms encounter immense challenges in securing the capital required for their expansion. They often struggle to obtain loans from traditional banking institutions, which are known for their lengthy approval processes, high collateral requirements, and stringent criteria. As of April 19, 2024, the MSME sector had received ₹10.4 lakh crore in credit from banks, compared to…
