Deloitte's State of Financial Services in India report found that India's micro, small and medium enterprises (MSMEs) face a Rs 25 tn formal credit gap as of March 2025, with only 14 per cent able to access formal loans. The report said that despite widespread digital financial inclusion, many small businesses continue to rely on informal lenders for working capital. It described the limited availability of formal credit as a key barrier to broader economic participation. The study noted that around 89 per cent of adults now have access to a financial account, and that the Unified Payments Interface processes more than 18 billion (18 bn) transactions every month. It added that around 16 per cent of bank accounts remain inactive and that only 15 per cent of adults access formal credit compared with a global average of 24 per cent. Insurance penetration remained low at three point seven per cent of GDP, about half the global average. The report argued that traditional collateral based lending models have restricted access for many small firms despite their contribution to employment and output. It recommended expansion of cash-flow-based lending using digital data such as goods and services tax records and bank statements to improve credit assessment. Strengthening digital lending infrastructure, including the Account Aggregator framework, was advised to make loans more accessible for suppliers, shopkeepers, contractors and artisans. Deloitte estimated that the unmet requirement could potentially be much larger, and noted that an assessment against an appropriate credit to GDP ratio could put the shortfall at around Rs 50 tn. The study suggested better tracking of MSME credit outcomes through measures such as formal credit penetration, demand supply gaps and adoption of digital credit platforms to improve policy targeting. It concluded that improving credit access for underserved businesses was critical to converting account ownership and digital transactions into broader economic participation.