NEW DELHI: Medium enterprises face severe challenges in accessing credit as the credit demand gap for the segment has reached $10 billion in 2024, showed a Niti Aayog report on Monday.
The report says there are no government schemes that address the working capital needs of Medium enterprises, which account for only 0.3% of all registered MSMEs, but contribute nearly 40% of MSME exports.
The report further says that MEs receive less priority sector loans, compared to micro enterprises, and the rate of loan is 4% higher for medium enterprises than for large corporations.
To address the funding issue, Niti Aayog suggests the introduction of a working capital financing scheme linked to enterprise turnover; a Rs 5-crore credit card facility at market rates, and expedited fund disbursal mechanisms through retail banks, overseen by the Ministry of MSME.
The report underscores other challenges faced by medium enterprises, including limited adoption of advanced technologies, inadequate R&D support, lack of sectoral testing infrastructure, and a mismatch between training programmes and enterprise needs.
“These limitations hinder their ability to scale and innovate,” says the report.
The report says there are 18 schemes for MSMEs, out of which only 8 are for medium enterprises, which are those units that have invested between Rs 25-125 crore in plant and machinery, and have a turnover of Rs 100-500 crore.
Total fund allocated to these 18 schemes is Rs. 5,442 crores, out of which funds for Schemes available to MEs are 17.81%. This segment of the MSME also severely lacks innovation and access to skilled labour, according to the report.
The report suggests the creation of a dedicated sub-portal within the Udyam platform featuring scheme discovery tools, compliance support, and AI-based assistance to help enterprises navigate resources effectively.
The report emphasises that unlocking the potential of medium enterprises requires a shift toward inclusive policy design and collaborative governance.
With strategic support in finance, technology, infrastructure, skilling, and information access, medium enterprises can emerge as the drivers of innovation, employment, and export growth.