India's fintech industry is urging the government to introduce measures in the upcoming budget that would improve credit accessibility for Micro, Small, and Medium Enterprises (MSMEs). Despite recent policy initiatives, a significant credit gap persists in the sector. According to the Reserve Bank of India, the total finance demand for MSMEs stands at $1,955 billion, with $1,544 billion specifically required in debt financing. Currently, only $289 billion of this demand is being met by banks, leaving a $530 billion gap that fintech companies and Non-Banking Financial Companies (NBFCs) could help fill.

The introduction of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has provided some relief, but experts suggest simplifying eligibility criteria for NBFCs to address the gap more effectively. Additionally, the government's Samadhaan portal shows significant unpaid dues, with over 40,000 pending applications, further exacerbating liquidity issues for MSMEs.