Gujarat’s micro, small and medium enterprises (MSMEs) have achieved a financial record, with banks disbursing Rs 3.79 lakh crore in credit during 2025–26 which is 22% above the target. The strong credit flow typically reflects better banking support, easier and improved digital lending systems, growing business activity and a thriving entrepreneurial ecosystem in the state.
According to data from the State Level Bankers Committee (SLBC), banks disbursed Rs 3,79,535 crore to MSMEs in 2025–26 against a target of Rs 3,10,917 crore. Gujarat achieved 122.07% of its MSME credit goal, exceeding it by Rs 68,618 crore.
MSMEs in Gujarat are seeing stronger access to credit, while state policies and the business environment are also playing a role in supporting their growth.
Gujarat powering India’s MSME engine
Gujarat continues to be one of India’s top MSME hubs, with over 33 lakh MSME units registered on the ‘Udyam’ portal. The state’s ability to channel such credit to small businesses shows how well-structured banking mechanisms and government incentives are working together to fuel entrepreneurship, job creation and industrial expansion.
As mentioned in an official release, “Achieving 122.07 per cent of the credit target for MSMEs is not only a reflection of the strong support from the banking sector, but also of the growing access to finance and the strength of state’s entrepreneurial ecosystem.”
Digital lending revolution: The ‘Credit Assessment Model’
A key driver behind this success is the introduction of the Credit Assessment Model (CAM) by public sector banks in 2025. CAM is a computer-based system that evaluates MSME loan applications using digital footprints instead of relying on traditional paperwork.
The system automatically pulls verified data such as:
- KYC details
- GST filings
- Bank statements
- Income tax returns
- Credit history
Based on this information, it determines the eligible loan amount and often provides in-principle approval instantly. This has made the process faster, simpler, and more transparent, allowing MSMEs to apply for loans from their phones or computers without visiting a bank branch.
Viksit Gujarat Industrial Policy-2026: Rs 10 lakh cr investment push
Gujarat’s Viksit Gujarat Industrial Policy-2026 is a five-year plan aimed at attracting around Rs 10 lakh crore in investment and strengthening the state’s position in advanced, sustainable manufacturing. The policy focuses on 21 priority sectors, including semiconductors, electronics, green energy, electric vehicles, chemicals, textiles, aerospace, drones and pharmaceuticals.
It offers a flexible “Choose Your Incentive” model, allowing businesses to opt for a mix of capital subsidy, interest subsidy and power-tariff reimbursement.
MSMEs, large industries and mega projects will receive incentives based on investment size, sector and location, while the policy also supports start-ups, R&D, skilling, worker housing, industrial parks, digital manufacturing and green practices such as wastewater recycling and zero-liquid discharge.
Government schemes boosting access to finance
The CAM system also integrates national support schemes like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This enables many small businesses to secure loans without mortgaging property or other assets, reducing barriers for first-time borrowers and those with limited collateral.
Such initiatives align with the broader goal of extending “Credit to the Last Mile,” ensuring that marginalised groups—including women entrepreneurs, rural artisans, and small farmers—can access formal finance easily.
SIDBI, ECLGS 5.0 expand MSME credit support
The government has also expanded MSME financing through SIDBI, which opened 71 new branches between April 2024 and July 2026. SIDBI’s direct-credit portfolio grew 36.8% year-on-year to Rs 51,687 crore as of March 2026, while its refinance portfolio rose 16.9% to Rs 4.51 lakh crore. It has also expanded co-lending with NBFCs and regional rural banks and launched digital and targeted lending initiatives for smaller and informal enterprises.
Under ECLGS 5.0, introduced in May 2026, eligible MSMEs could access additional credit of up to 20% of their peak FY26 working-capital outstanding, backed by a 100% government guarantee for lenders. The scheme envisaged Rs 2.55 lakh crore in additional credit for MSMEs, non-MSMEs and airlines.
Leadership vision: Banking as a growth catalyst
At the 190th SLBC meeting in Gandhinagar, Chief Minister Bhupendra Patel emphasised the role of the banking sector in India’s economic rise. He stated that under Prime Minister Narendra Modi’s leadership, India is advancing toward becoming the world’s third-largest economy, with MSMEs playing a central role.
CM Patel urged banks to continue expanding outreach and simplifying access to credit, especially for underserved sections of society. The announcement coincides with National Small Industry Day, observed every year on August 30 to honour the contributions of small-scale industries to India’s economic development.