Mumbai: UGRO Capital Ltd., a DataTech-focused NBFC specialising in MSME lending, in collaboration with Dun & Bradstreet, has unveiled the fourth edition of the MSME Sampark Report, offering a comprehensive assessment of the evolving MSME landscape in India.
The MSME Sampark Report is based on an analysis of more than 73,000 MSMEs across eight key sectors, along with an exclusive nationwide survey of over 5,000 MSMEs.
The MSME Sampark Report highlights the impact of global trade disruptions, including rising US tariffs and muted export demand, on MSME revenues across sectors such as textiles, automotive, chemicals, food processing and electrical equipment.
Despite these headwinds, Indian MSMEs continue to demonstrate resilience by expanding their credit footprint, deepening formalisation, and maintaining growth momentum in a challenging global environment.
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MSME Sampark Report Highlights Credit Expansion and Sectoral Resilience
Commenting on the findings, Shachindra Nath, Founder and Managing Director of UGRO Capital, said the report reflects the resilience and adaptability of India’s MSME ecosystem amid sectoral and global trade challenges.
He noted that the UGRO-exclusive MSME survey provides insights into how improved credit access, formalisation and digitalisation are shaping the transformation of small businesses.
He further highlighted that 83% of surveyed MSMEs reported no difficulty in accessing credit, with NBFCs emerging as the preferred financing partners.
Dr Arun Singh, Global Chief Economist at Dun & Bradstreet, said that the Global Business Optimism Index indicates moderation in overall optimism among Indian small and medium businesses as they adapt to a challenging trade environment.
However, he pointed out that expectations for future domestic orders have strengthened, supported by robust industrial output and a supportive price environment.
He added that increased credit disbursement to micro and small enterprises in July 2025 reflects the effectiveness of government-backed credit guarantee schemes, while sustained growth will depend on targeted policy interventions and insulation from global trade disruptions.
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Key Findings from the 4th MSME Sampark Report
MSMEs’ contribution to India’s GDP rebounded from 27.3% in FY21 to nearly 30% in FY25.
- Rising global supplier risks are driving a shift towards localised supply chains, while policy uncertainty continues to weigh on sales and export sentiment.
- FY24 showed mixed EBITDA performance among micro enterprises, reflecting divergent cost structures and operational strengths across sectors.
- Credit growth to micro and small enterprises rose 12% year-on-year, outpacing overall credit growth, while medium enterprises recorded 14% year-on-year growth.
- Increased imports of low-cost Chinese goods and weak global demand impacted revenue margins in auto components, electrical equipment and chemical sectors.
- Udyam registrations increased 18%, rising from 58.46 million in January 2025 to 68.85 million in September 2025, signalling stronger formalisation and deeper integration into the formal economy.
- MSMEs face heightened stress from US tariffs, particularly in textiles, gems, auto components and agri-marine subsectors.
The MSME Sampark Report analyses MSME performance across eight sectors over FY20–FY24.
MSME Sampark Report: Sectoral Trends and Credit Dynamics
- Revenue Trends in Micro Enterprises
- Micro manufacturing enterprises recorded a broad-based revenue decline in FY24 compared to FY23, driven by weaker performance in automotive, chemical, education, electrical equipment and light engineering segments.
- The slowdown reflects persistent trade uncertainties, supply chain disruptions and intensified competition from low-cost imports.
- Rising Credit Allocation to MSMEs
- Credit flow to MSMEs strengthened significantly, with secured loans increasing from 80% in Q1FY24 to 89% in Q1FY25.
- Unsecured lending also gained traction, particularly in healthcare, electrical equipment and chemical sectors between January–March 2024 and the corresponding period in 2025, indicating improved access to finance supported by higher risk appetite and government credit guarantee schemes.
- Global and Domestic Policy Support
- In response to US tariff pressures, countries such as Thailand, Taiwan, China and Brazil have introduced targeted MSME support measures, including credit lines, export guarantees and digital upskilling initiatives.
- In India, policy actions such as GST revisions, cumulative policy rate cuts of 100 basis points in 2025, and efforts to diversify export markets aim to strengthen MSME competitiveness and domestic growth.
