Lok Sabha Question No. 1004 (UNSTARRED), answered on 2026-02-05
Subject: NPAs in MSME Loans
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Thiru Arun Nehru

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 1004 TO BE ANSWERED ON: 05.02.2026

## NPAs IN MSME LOANS

## 1004. THIRU ARUN NEHRU:

Will the minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the total number of Udyam-registered Micro, Small and Medium Enterprises (MSMEs) that have cancelled their registration or shut down operations in Financial year 2024-25 and 2025-26;
- (b) whether the Government acknowledges the widening credit gap (estimated at 28 lakh crore) for the MSME sector despite numerous loan schemes, if so, the details thereof;
- (c) the percentage of MSME loans that have turned into Non-Performing Assets (NPAs) in the current fiscal year;
- (d) the reasons for the failure of the Emergency Credit Line Guarantee Scheme (ECLGS) to save micro-units from insolvency; and
- (e) the steps taken to protect MSMEs from predatory lending apps?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

- (a): To  facilitate  the  enterprises  in  line  with  Ease  of  doing  Businesses,  Udyam  Registration Portal  was  launched  for  registration  of  an  enterprise  on  01.07.2020  and  launch  of  Udyam  Assist Platform, on 11.01.2023, for bringing Informal Micro Enterprises (IMEs) in the formal ambit.  The total number of Micro, Small and Medium Enterprises (MSME) registered on Udyam registration till 31 st January, 2026 is 7,61,12,097 (Seven crore sixty one lakh twelve thousand and ninety seven), out of which MSME de-registered due to shut down during the financial year 2024-25 and 2025-26 (till 31 st January, 2026) are 39,446 and 53,563 respectively.
- (b): Department of Financial Services (DFS) has informed that as per the survey conducted by SIDBI during FY-2025, 75% of respondents reported availing formal credit, 8% relied exclusively on informal credit sources, while 17% had not availed any form of credit. The survey was conducted on  sample basis covering 2,097 MSMEs  across  19  sectors across India. (Source: SIDBI, Understanding Indian MSME Sector - Progress and Challenges, May 2025).
- (c): Department  of  Financial  Services  (DFS)  informed  that  as  per  the  RBI,  total  advances  of Scheduled Commercial Banks (SCBs) to the MSME sector stand at Rs. 35,83,337.55 crore, while Gross NPAs amount to Rs.1,17,186.88 crore, as on 30.9.2025 (current financial year), accounting to 3.27%.

(d): Emergency Credit Line Guarantee Scheme (ECLGS) was launched in May, 2020 as part of Aatmanirbhar Bharat Abhiyaan to support eligible Micro, Small and Medium Enterprises (MSMEs) and business enterprises to ease their liquidity position. National Credit Guarantee Trustee Company Ltd. (NCGTC) has informed that under ECLGS, 1.13 crore guarantees amounting to Rs. 2.43 lakh crores have been issued to MSMEs. As per a research report dated 23.1.2023 of the State Bank of India on ECLGS, almost 14.6 lakh MSME accounts of which about 93.8% of the accounts were in the micro and small enterprises categories, have been saved from slipping into non-performing asset (NPA) classification, due to ECLGS.

(e): RBI has informed that, to address business conduct concerns in digital lending, guidelines have been issued vide its circular dated September 02, 2022, later consolidated under the Reserve Bank  of  India  (Credit  Facilities)  Directions,  2025  dated  November  28,  2025.  The  framework emphasizes  customer  centricity  and  places  the  responsibility  for  compliance  by  Lending  Service Providers (LSPs) and Digital Lending Apps (DLAs) on the RBI-regulated entities on whose behalf they  operate.  Further,  with  effect  from  July  1,  2025,  the  RBI  has  also  operationalized  a  public Directory  of  Digital  Lending  Apps  (DLAs)  on  its  website,  based  on  data  submitted  by  regulated entities  through  the  CIMS portal.  The  directory,  which  is  updated  regularly, enables  customers  to verify  the  association  of  DLAs  with  regulated  entities  and  is  accessible  from  the  website  of  RBI under Citizen's Corner → DLAs deployed by Regulated Entities.

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