IndusInd Bank inks MoU with NSIC for extending credit to strengthen credit access for MSMEs

In a strategic move to promote financial inclusion and stimulate the MSME (Micro, Small, and Medium Enterprise) sector, IndusInd Bank has entered into a Memorandum of Understanding (MoU) with the National Small Industries Corporation (NSIC). 

This partnership aligns with the Government’s push to strengthen credit delivery mechanisms and expand access to formal financing for entrepreneurs across India.

What is the New MoU between IndusInd Bank and NSIC?

IndusInd Bank has signed an MoU with NSIC, under the Ministry of MSME, aiming to accelerate credit delivery and offer comprehensive financial support to MSMEs. Notably, this initiative targets the approximately 6.7+ crore MSMEs registered on the Udyam portal—ensuring the credit ecosystem reaches a wide spectrum of small businesses.

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Who will benefit from this IndusInd Bank and NSIC MoU?

The primary beneficiaries are Udyam-registered MSMEs, especially micro and small enterprises that often face hurdles in accessing formal credit. By streamlining processes and leveraging NSIC's facilitation framework, these entities can enjoy improved access to working capital, term loans, and other tailored financial products. This partnership especially empowers businesses seeking to scale or transition into formal financial systems.

What will happen if MSMEs are given credit with ease?

When MSMEs secure timely and affordable credit, several downstream effects manifest:

• It boosts operational efficiency, allowing the timely procurement of raw materials and the expansion of production capacities.
   
• It empowers entrepreneurs to innovate, invest in new technologies, or diversify product lines.
   
• Enhanced liquidity strengthens resilience during economic downturns, helping to prevent business failures.
   
• Credit ease often translates into growth in employment, higher regional development, and participation in government schemes.
   

Underpinning these outcomes, NSIC’s collaboration acts as an enabler—facilitating both access and affordability, thereby supporting economic stability and inclusive growth.

How many banks have signed an MoU to extend credit access to the MSME sector?

NSIC has inked MoUs with five private sector banks as part of its MSME Credit Facilitation Programme. Alongside IndusInd Bank, the other participating banks are Axis Bank, Dhanlaxmi Bank, Karnataka Bank, and AU Small Finance Bank.

Table 1: Banks Partnered with NSIC for MSME Credit Facilitation

Before the table, a quick note: here’s an at-a-glance comparison of the banks collaborating with NSIC under this initiative.
 

How many loans were disbursed to the MSME sector in 2024-2025?

Robust policy interventions and bank credit facilitation are reflected in the rising volume of loans disbursed to MSMEs.

Here are key figures:

• Overall sector credit exposure (commercial credit to MSMEs) reached approximately ₹35.2 lakh crore as of March 31, 2025—a 13% year-on-year increase.
   
• According to CRIF High Mark, the MSME credit market expanded to ₹40.4 lakh crore as of March 2025, marking a 25% growth—highlighting inclusion of additional avenues beyond just traditional channels.
   
• Additionally, by March 2024, loans under priority sector lending to MSMEs stood at ₹21.73 lakh crore, up from ₹10.99 lakh crore in 2019—showcasing a long-term upward trajectory.
   

MSME Credit Disbursement and Exposure (₹ lakh crore)

Before the table, here is a snapshot of how credit to MSMEs has surged over the recent years.
 

What is NSIC and What’s its role in strengthening MSMEs?

NSIC (National Small Industries Corporation) is a Government of India enterprise under the Ministry of MSME. Its mission is to enhance the competitiveness and sustainability of MSMEs through credit facilitation, marketing support, technology diffusion, and skill development.

• Through credit facilitation, NSIC links MSMEs to formal financial channels via MoUs, enabling access to structured and efficient loan mechanisms.(msme.gov.in, Press Information Bureau)
   
• It also supports MSMEs in domestic and international markets through schemes around procurement, capacity building, and export promotion.
   

Also Read - MSME Alert: New Govt Loan Schemes For 2025 Growth

Through these multifaceted efforts, NSIC acts as a critical catalyst—fostering enterprise growth, bridging informal and formal segments, and empowering small businesses to thrive.

Conclusion

IndusInd Bank’s MoU with NSIC marks a pivotal stride toward deepening financial inclusion for India’s MSMEs. By jointly targeting over 6.7 crore Udyam-registered enterprises and aligning with a broader network of partner banks, the initiative promises to transform credit accessibility. Given the rapid increase in MSME credit—from ₹21.7 lakh crore in 2024 to over ₹40 lakh crore by early 2025—the timing could not be more apt. As NSIC continues to drive credit facilitation and capacity building, such collaborations will be instrumental in scaling MSME resilience, entrepreneurship, and economic impact across India.
 

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