Indian banks are becoming more cautious about lending to MSMEs as early signs of stress emerge in the sector. According to a 360 ONE Capital report citing CRIF High Mark data, MSME loan growth slowed to 12.7% year-on-year in April 2026 from around 18%-20% in previous quarters, while growth in active loans decelerated sharply to 2.5%.
Indian banks are becoming more cautious about lending to MSMEs as early signs of stress emerge in the sector. According to a 360 ONE Capital report citing CRIF High Mark data, MSME loan growth slowed to 12.7% year-on-year in April 2026 from around 18%-20% in previous quarters, while growth in active loans decelerated sharply to 2.5%.
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