GST cut drives MSME loan demand

CHENNAI/MUMBAI: The GST complaint chopped is driving MSMEs to question further backing from banks for expansion. After the GST rejig, banks person seen a spike successful enquiries for advances from the MSMEs.

It comes amid lenders having moved person to their yearly targets for the MSME conception successful the archetypal fractional of the existent fiscal. For instance, state-owned Indian Overseas Bank has recorded its MSME portfolio touching Rs 48,000 crore arsenic of Sept 30, 2025, retired of the full people of Rs 51,000 crore for the afloat fiscal year, a 16.7% summation YoY. Indian Overseas Bank's MD & CEO Ajay Kumar Srivastava said govt has taken respective initiatives to accelerate MSME growth, specified arsenic their classification and turnover.

Noting that the slope is apt to scope Rs 55,000 crore successful its MSME portfolio this fiscal, helium said, GST volition beryllium 1 of the large factors. "We are focusing connected the manufacturing (in the MSME) sector," helium added.To people the high-growth MSME segment, the country's largest lender SBI has launched integer MSME loans. These loans connection MSMEs end-to-end sanctions successful 45 minutes. The slope has processed astir 2.3 lakh specified accounts with recognition limits of Rs 74,434 crore up to Aug 2025.

Indian Bank MD & CEO Binod Kumar said, determination has been bully traction from the MSMEs, with the YoY maturation tripled from 5-6% to astir 17% (FY25 vs FY26). "We are seeing request chiefly from the services sector, including hospitality. It is for their enlargement plans oregon mounting up caller hotels some during pre- and post-GST 2.0. Major request is besides coming from the ancillary units. We volition transcend our people for MSMEs this year," helium said.

PNB has launched a slew of products, including broad financing up to Rs 100 crore, integer MSME loans alteration paperless lending up to Rs 25 lakh. The slope has besides introduced a afloat integer MSME indebtedness of up to Rs 5 crore backed by CGTMSE warrant and concessional rates.Bankers said that different crushed for the thrust connected MSME loans is that the caller regulations connected expected recognition nonaccomplishment marque it little superior intensive for banks to lend to MSMEs.