+
CRISIL Flags MSME Risks As Bank Credit Growth May Ease To 13 per cent
ECONOMY & POLICY

CRISIL Flags MSME Risks As Bank Credit Growth May Ease To 13 per cent

Credit Rating Information Services of India Limited (CRISIL) Ratings has warned that bank credit growth in India may ease to 13 per cent in FY27, reflecting a moderation from recent cyclical highs. The agency noted that this slowdown would coincide with heightened risks in the micro, small and medium enterprises (MSMEs) sector. CRISIL indicated that banks may face a slower pace of fresh lending as demand softens. The outlook reflects a transition from cyclical credit recovery to a more calibrated growth phase.

Slower deposit mobilisation and a gradual normalisation of the liquidity cycle are expected to tighten available lending capacity. Banks may prioritise secured exposures and larger corporates, thereby constraining credit flows to riskier segments. The agency cited tighter underwriting and selective credit deployment as likely responses by lenders. Smaller lenders may face sharper trade-offs between growth and capital conservation in this environment.

Micro, small and medium enterprises are likely to be most affected given their greater reliance on working capital and limited access to diversified funding. Rising input costs and weaker demand could amplify stress for firms with thin buffers. CRISIL suggested that pockets of stress may emerge in industries with concentrated exposure or seasonal cash flows. Access to formal channels and improved receivables management will be key determinants of resilience for many firms.

The potential moderation in credit growth is likely to keep asset quality under watch and prompt banks to shore up provisions where necessary. Policy measures and targeted liquidity support could help alleviate pressures on viable MSMEs and maintain credit access. CRISIL emphasised the need for continued monitoring by regulators and lenders as the operating environment evolves. Banks are expected to balance risk management with the objective of supporting economic activity as conditions moderate.

Credit Rating Information Services of India Limited (CRISIL) Ratings has warned that bank credit growth in India may ease to 13 per cent in FY27, reflecting a moderation from recent cyclical highs. The agency noted that this slowdown would coincide with heightened risks in the micro, small and medium enterprises (MSMEs) sector. CRISIL indicated that banks may face a slower pace of fresh lending as demand softens. The outlook reflects a transition from cyclical credit recovery to a more calibrated growth phase. Slower deposit mobilisation and a gradual normalisation of the liquidity cycle are expected to tighten available lending capacity. Banks may prioritise secured exposures and larger corporates, thereby constraining credit flows to riskier segments. The agency cited tighter underwriting and selective credit deployment as likely responses by lenders. Smaller lenders may face sharper trade-offs between growth and capital conservation in this environment. Micro, small and medium enterprises are likely to be most affected given their greater reliance on working capital and limited access to diversified funding. Rising input costs and weaker demand could amplify stress for firms with thin buffers. CRISIL suggested that pockets of stress may emerge in industries with concentrated exposure or seasonal cash flows. Access to formal channels and improved receivables management will be key determinants of resilience for many firms. The potential moderation in credit growth is likely to keep asset quality under watch and prompt banks to shore up provisions where necessary. Policy measures and targeted liquidity support could help alleviate pressures on viable MSMEs and maintain credit access. CRISIL emphasised the need for continued monitoring by regulators and lenders as the operating environment evolves. Banks are expected to balance risk management with the objective of supporting economic activity as conditions moderate.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

NABARD Holds Seminar on Vigilance, Integrity and Good Governance

National Bank for Agriculture and Rural Development (NABARD) organised a seminar on “Vigilance: Strengthening Integrity and Good Governance” on 25 August 2026 at its Head Office in Mumbai as part of the ongoing Vigilance Awareness Campaign 2026 being observed from 17 August to 16 November 2026, with the theme “Probity for Prosperity."" The seminar was graced by Suresh N Patel, Former Central Vigilance Commissioner, Government of India, as the chief guest and keynote speaker.  The programme was attended by G S Rawat, Deputy Managing Director, Dr Ajay K Sood, Deputy Managing Dire..

Next Story
Equipment

XCMG Unveils World's First 14,000-Ton Ring Crane for Heavy Lifting

XCMG has announced that the first main unit of the world's first 14,000-ton ring crane has rolled off the production line, marking a historic breakthrough in ultra-heavy lifting technology. Jointly developed by XCMG and Sinopec Heavy Lifting & Transportation Co., Ltd., the crane will be the largest-capacity ring crane ever built, setting a new benchmark for major construction projects worldwide.The crane features a modular configuration comprising two main units that work in tandem. The first main unit has completed final assembly and can independently perform lifting operations. Once both..

Next Story
Infrastructure Urban

Thriveni Logistics orders 200 tip trailers from Jagdamba trailers

Jagdamba Trailers (JTPL), one of India’s growing trailer manufacturers, has secured a significant order for 200 Tip Trailers from Thriveni Transport and Logistics Pvt. Ltd., a leading mining and logistics company serving operations across India and overseas.The order, placed for iron ore transportation, is a major milestone for JTPL, particularly as the company secured the business after competing with more than 10 established trailer manufacturers. It also strengthens an already successful relationship between the two companies. Approximately one and a half years ago, Thriveni Transport and..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code