Indian banks are becoming more cautious about lending to MSMEs as early signs of stress emerge in the sector. According to a 360 ONE Capital report citing CRIF High Mark data, MSME loan growth slowed to 12.7% year-on-year in April 2026 from around 18%-20% in previous quarters, while growth in active loans decelerated sharply to 2.5%.

Indian banks are becoming more cautious about lending to MSMEs as early signs of stress emerge in the sector. According to a 360 ONE Capital report citing CRIF High Mark data,…

Lenders are concerned about the ripple effects of the West Asia conflict, which has disrupted supply chains and increased input costs for businesses. While the full impact is yet…