Vidyadhar Anaskar, Chairman of the Maharashtra State Cooperative Bank (MSCB), has called for a fundamental shift in the way cooperative banks lend to micro, small and medium enterprises (MSMEs). Speaking at the 2025 Banking and MSME Sector Conclave in Pune, Anaskar advocated for a transition from collateral-based lending to project-focused financing models.

Highlighting current flaws in the lending system, Anaskar criticised the widespread requirement for personal property as collateral, arguing that it contradicts the very spirit of MSME support. He stressed the need to realign banking practices to better serve India’s entrepreneurial base.

The event, jointly organised by Sahakar Bharati and the Global Indian Origin Network, brought together key stakeholders to discuss MSME financing challenges and sectoral reforms. Dinesh Gandhi, Chairman of Sahakar Bharati, underscored the sector's importance, noting that it sustains around 110 million families and plays a vital role in employment generation.

Anaskar also pointed to the housing segment as a lucrative opportunity for cooperative banks due to its stable repayment prospects and collateral reliability. He contrasted this with commercial real estate, which remains outside the Reserve Bank of India's priority sector classification due to its dual financing model involving both banks and homebuyers.

He called for better collaboration with auditors and accounting professionals to streamline the project appraisal and financing process.

Adding to the discussion, Indraneel Chitale, Managing Partner of Chitale Bandhu Mithaiwale, highlighted the bureaucratic hurdles that impede first-generation entrepreneurs. He emphasised that excessive paperwork in the loan application process diverts focus from business development, urging banks to reduce administrative red tape to help enterprises grow efficiently.

The conclave reflected a growing consensus on the need for financial reforms to foster a more inclusive and supportive MSME ecosystem in India.