DFS Secretary Chairs IBA Meet on MSME Empowerment, Growth & Future Roadmap

The Department of Financial Services (DFS), Ministry of Finance, organized a high-level meeting on “Empowering MSMEs: Opportunities, Challenges and Way Forward”, chaired by the Secretary, Financial Services. The event, hosted by the Indian Banks’ Association (IBA), brought together senior representatives from Small Industries Development Bank of India (SIDBI), leading Public and Private Sector Banks, the IBA leadership, and major MSME industry associations from across India.

MSMEs: The Backbone of India’s Economy

In his keynote address, the Secretary emphasized the critical role of MSMEs as the backbone of the Indian economy, accounting for nearly 30% of GDP and contributing over 45% of India’s exports. He highlighted that the sector drives grassroots entrepreneurship, employment generation, and inclusive growth, while also serving as a bridge between traditional industries and modern technology-led enterprises.

He noted that the MSME sector will be central to India’s vision of “Viksit Bharat 2047”, by fueling job creation, innovation, and sustainable development. Strengthening MSMEs with better access to finance, advanced technology, and wider market linkages, he said, is pivotal to building a self-reliant and globally competitive India.

Collective Action for Sectoral Growth

The Secretary called for stronger collaboration between government agencies, financial institutions, and industry associations to unlock new opportunities for the MSME sector. He emphasized that responsive policymaking, coupled with innovative banking and financing solutions, would ensure that MSMEs are empowered to thrive in both domestic and global markets.

“By working together—industry, government, and financial institutions—we can unlock the full potential of India’s MSMEs. Collective insights and shared commitment will pave the way for more responsive policies and impactful support systems,” he stated.

Government Initiatives and Policy Support

The meeting also featured a detailed presentation on Government of India’s MSME initiatives, outlining schemes designed to expand credit availability, strengthen digital infrastructure, encourage formalization, and enhance competitiveness.

Participants deliberated on:

• Full transition to digital loan processes to reduce delays and improve efficiency.

• Adoption of cash-flow based underwriting models for better risk assessment.

• Tackling the persistent issue of delayed payments to MSMEs.

• Strengthening financial literacy and awareness among MSME entrepreneurs.

• Improving data quality and analytics to support credit flow.

• Expanding market access through digital platforms and e-commerce.

Setting a Future Roadmap

The roundtable concluded by outlining medium- and long-term priorities for the MSME ecosystem. These include creating a robust digital credit ecosystem, strengthening cluster-based financing models, promoting innovation and green technologies, and ensuring inclusive growth of micro and small enterprises in rural and semi-urban areas.

The DFS and IBA affirmed their continued commitment to policy responsiveness, innovation in banking practices, and sustained support for MSME growth. Stakeholders expressed confidence that the discussions would lead to actionable reforms, ensuring MSMEs remain the driving force of India’s economic transformation.