ContextRemarks by the Governor of the Reserve Bank of India opening the week of International MSME Day, before small business owners.
Why it mattersIndia's central bank chief on getting more credit to small firms using the country's digital public infrastructure.
- Small businesses still lack enough formal credit.
- Lenders underuse India's digital public infrastructure.
- Government support schemes are not applied fast enough.
- Use digital tools like Account Aggregator, TReDS and ULI for lending.
- Speed up priority-sector and credit guarantee schemes.
- Keep building payment rails and reducing friction for MSMEs.
Read the speech summary
1. Why small firms matter
Opening an MSME Day event in Kochi, Reserve Bank of India Governor Sanjay Malhotra said micro, small and medium enterprises are about 90% of businesses worldwide and half of jobs; in India they produce 31% of GDP, about 35% of manufacturing output and close to half of merchandise exports, supporting over 320 million livelihoods. A financial system that serves its smallest and most numerous participants poorly, he said, is not serving the economy.
2. What the RBI has done
He listed measures: priority-sector classification with a sub-target for micro firms; collateral-free loans, with the limit doubled from 1 million to 2 million rupees; wider credit-guarantee cover with zero risk weight on the guaranteed portion; the receivables discounting platform TReDS; simpler working-capital norms; priority-sector recognition for co-lending; the Account Aggregator, which supported about 3.5 trillion rupees of lending in 2025-26; and a ban on prepayment charges on floating-rate loans to individuals and small firms. Town halls, banker training and empowered committees keep the dialogue going. Bank credit to the sector reached 36.79 trillion rupees, growing about 15% a year over five years against 13.7% for all credit, though he admitted the gap is not closed.
3. Unified Lending Interface and expectations
The Unified Lending Interface should do for credit what UPI did for payments, letting lenders assess a borrower with consent-based digital data such as tax filings, bank statements and utility or land records instead of weeks of paperwork, which helps firms with thin credit histories. He asked financial institutions to invest in the public digital stack, accelerate scheme delivery and treat small firms as long-term partners, not regulatory obligations. He asked entrepreneurs to invest in technology and innovation, use the available platforms, register on the free online Udyam portal to access government schemes, and build trust through formalisation, digital adoption and financial discipline. The RBI promises to keep building the rails and reducing friction.