Even as fears are expressed about credit flow to small businesses in the immediate term, a study Wednesday pegged digital lending to the MSME sector to grow 15 times to up to USD 100 billion annually in five years. This will be possible largely on the back of a reliance on informal sources of funding, the study by impact investing firm Omdiyar Network and consultancy firm BCG said. "As of 2018, most of the credit demand for USD 600 billion is being met through informal sources.India stands on the cusp of a watershed moment and can serve as a case study for other nations to elevate the role of MSMEs in the economy," Omdiyar's partner and managing director for India, Roopa Kudva, said. The study comes even as there are concerns with regard to flow of credit to the micro, small and medium enterprises (MSME) sector as the non-bank finance companies, which have upped their play in such loans, face troubles. There are also concerns on the continuing impact of demonetisation and GST on the sector, due to which the RBI board has advised the central bank Monday to come up with a scheme to restructure loans of up to Rs 25 crore. The study said there are 60 million MSMEs having turnovers of less than Rs 250 crore at present and they are a major contributor both to the country's GDP as well as to employment generation. However, the contribution of Indian MSMEs is far below that of their counterparts in the US or even China as they lack access to formal sources of finance and pay interest rates which are 2.5 times the ones charged by the formal sector, it added. The study argues that this scenario will undergo a rapid change, stating that 40 per cent of the MSMEs will be receptive to digital lenders. This will be possible on government policies like introduction of the unified payment interface (UPI) and goods and services tax (GST), massive reduction in costs of data connectivity and also the 'India stack'. "Easier and cheaper credit through digital lending has the potential to trigger a virtuous cycle for formalisation: up to 85 per cent of MSMEs could be formal by 2023," BCG's senior partner, Saurabh Tripathi, said, adding that at present 60 per cent of MSMEs depend on informal sources of finance. An increasing number of MSMEs are willing to share their data online and 60 per cent believe they will get larger amount of payments through the digital means in the next three years, the study said.