New Delhi, June 12 -- Amid increasing global uncertainty, credit growth in the micro, small, and medium enterprise (MSME) sector has started showing signs of moderation, with loan growth declining to 13 per cent year-on-year in April 2026 from 20 per cent in December 2025, according to a report by IIFL Capital.
The brokerage, however, expects the impact of the slowdown to be cushioned by the government's Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, which was announced in May 2026 to support MSMEs facing challenges arising from the West Asia conflict.
Under the latest version of the scheme, the government has extended 100 per cent credit guarantee coverage for loans provided to standard MSMEs, with the total loan amount capped at Rs...