MSMEs record improving trend in access to credit in Q3FY26: SIDBI survey

NEW DELHI: The Small Industries Development Bank of India (SIDBI) on Tuesday unveiled the fifth round of its quarterly MSME Outlook Survey for the October-December 2025 quarter, highlighting sequential stability in MSME confidence despite persistent external risks.

On financing conditions, the survey recorded an improving trend in access to credit. Optimism regarding working capital availability among manufacturing respondents rose to 46 per cent in the October-December 2025 quarter from 35 per cent in the preceding quarter.

Overall finance availability sentiment in manufacturing improved to 47 per cent. Services saw marginal gains, while trading enterprises reported moderation in working capital sentiment even as overall finance outlook strengthened, the survey noted.

According to the survey, the composite MSME Business Conditions Index (M-BCI) stood at 60.8 in the October-December 2025 quarter, marginally lower than 61.6 recorded in the previous quarter. Manufacturing sentiment improved, with the sectoral M-BCI rising to 64.1 from 62.9, while trading and services witnessed moderation.

The MSME Business Expectations Index (M-BEI), a forward-looking indicator, projected a positive outlook. The composite M-BEI is expected to increase to 63.7 in the next quarter and further to 65.0 in the corresponding quarter one year ahead (October-December 2026), reflecting optimism across sectors.

On financing conditions, the survey recorded an improving trend in access to credit. Optimism regarding working capital availability among manufacturing respondents rose to 46 per cent in the October-December 2025 quarter from 35 per cent in the preceding quarter. Overall finance availability sentiment in manufacturing improved to 47 per cent.

Services saw marginal gains, while trading enterprises reported moderation in working capital sentiment even as overall finance outlook strengthened.

Profitability concerns persisted in some segments. While most respondents reported stable margins, the net response on profit margins declined or turned negative for services and trading sectors compared to the previous quarter. However, MSMEs anticipated improvement over the year ahead, particularly in services.

A year-on-year comparison showed improvement in overall MSME sentiment, supported by a favourable domestic macroeconomic environment and policy measures on credit access. Working capital finance and overall finance indicators registered the strongest gains, alongside better sales/revenue and business scenario readings.

The survey also captured strong interest among MSME exporters in policy support initiatives. About 43 per cent of respondents planned to avail RBI’s Trade Relief measures, 46 per cent intended to adopt the Credit Guarantee Scheme for Exporters (CGSE), while nearly 37 per cent expected to use both options.

On regulatory reforms, SIDBI noted that new labour codes could help MSMEs advance formalisation. While 34-36 per cent of firms anticipated a short-term rise in compliance costs, respondents emphasised the need for clearer guidance and stronger training and awareness initiatives to ease adoption. (ANI)