- KredX Editorial Team
- 15 Feb 21
- business

Did you know that only 16% of the MSMEs in India have access to formal funding?
In other words, over 80% of this sector are either underfinanced or are forced to access funds from informal sources, according to an IFC-Intellecap report.
This glaring gap in access to credit not only leads to a wide disparity in terms of tackling debt but also eroding production capacity of businesses. Unlike large corporates, MSMEs have limited means to external funding. However, India’s credit landscape has improved for these enterprises, slowly but surely, over the past years.
Multiple options of MSME loans are available today, and there’s a significant thrust in mending the credit gap across the board, from the government to fintech companies.
Types Of MSME Loans
These are the most popular options of financing for MSMEs –-
Bank Guarantee
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Letter Of Credit
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Business Loan
- Procuring latest equipment and managerial software systems
- Meeting cost of expansion or renovation
- Boosting working capital
- Procuring raw materials or restocking inventory
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Bill Discounting
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Credit Guarantee Fund Trust For Micro And Small Enterprise (CGTMSE) Scheme