Axis, IndusInd, AU SFB Join NSIC to Drive Last-Mile Lending for Small Enterprises

In a significant step to improve the flow of credit to India’s micro, small and medium enterprises (MSMEs), the National Small Industries Corporation (NSIC) has signed Memoranda of Understanding (MoUs) with Axis Bank, Dhanlaxmi Bank, Karnataka Bank, AU Small Finance Bank and IndusInd Bank under its MSME Credit Facilitation Program.

The MoU exchange ceremony was attended by Shri Jitan Ram Manjhi, Union Minister of MSME, and Shri S.C.L. Das, Secretary (MSME). The agreements were formally signed between Shri Gaurav Gulati, Director (Finance), NSIC and senior executives from the participating banks, in the presence of Ms. Mercy Epao, JS (SME), Dr. S. S. Acharya, CMD, NSIC and other senior officials.

The initiative aims to enhance the availability, accessibility, and affordability of credit for MSMEs, particularly those at the fringes of the formal financial system. By linking small enterprises with mainstream banks, the program is expected to act as a force multiplier for credit delivery and foster last-mile inclusion.

Moving from Intent to Impact

While public sector programs have long sought to bridge the MSME credit gap, this collaboration with private and small finance banks signals a shift toward a more market-oriented partnership model. The inclusion of agile lenders like AU Small Finance Bank alongside larger commercial players reflects an understanding that India’s 60 million–strong MSME base needs diverse credit channels, not just schemes routed through public banks.

However, the real test will be in execution. Unless these MoUs translate into on-ground disbursals, faster turnaround times and risk-sharing mechanisms, MSMEs may not see tangible relief from persistent credit bottlenecks. With the Reserve Bank pushing for cleaner balance sheets and stricter underwriting norms, banks will need to strike a careful balance between expanding outreach and maintaining credit discipline.

If implemented effectively, this initiative could help formalize lending relationships for smaller enterprises, encourage better compliance and make them investment-ready a prerequisite for India’s ambition to scale its MSME sector into a global supply-chain powerhouse.