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Industry associations of the Micro, Small and Medium Enterprises (MSME) sector highlighted business challenges being posed by the uncertainty arising from geopolitical situations, and sought the intervention of government, regulators and banks to wither the challenges. The Reserve Bank of India (RBI) held 30th meeting of its Standing Advisory Committee (SAC) to review the flow of credit to the MSME sector today in Coimbatore under the chairmanship of Swaminathan J, Deputy Governor (DG), RBI. “During the interactive session, the industry associations highlighted the challenges being posed by the uncertainty arising from geopolitical situations and sought the intervention of Government, Regulators and Banks. The meeting concluded with responses from the officials and an assurance that the feedback and suggestions will be duly examined by the concerned stakeholders,” the RBI said. To further strengthen the credit ecosystem for MSMEs, DG Swaminathan referred to initiatives such as the Unified Lending Interface (ULI), Account Aggregator framework, and the Regulatory Sandbox, which are facilitating data-driven and cash-flow based lending. He also spoke about the recent regulatory measures to ease the difficulties faced by the sector, including the waiver of prepayment charges on floating-rate loans extended to individuals and micro and small enterprises, and the relaxation in reporting under the Export and Import Data Processing and Monitoring Systems (EDPMS/IDPMS) to ease compliance burden for small exporters and importers. Challenges such as information asymmetry, financial literacy gaps, and delayed payments still exists for MSMEs and the DG stressed on the need to promote wider adoption of digital solutions like the Trade Receivables Discounting System (TReDS), encourage alternative credit assessment models, and ensure fair, transparent, and empathetic lending practices for promotion of rehabilitation of distressed but viable units. He also urged MSME associations to play a greater role in capacity building and in bridging information gaps to help enterprises better leverage formal financial channels. Published on October 27, 2025
