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Banks May Tighten Lending to MSMEs
Business Standard
|August 02, 2025
Experts Say 25% US Tariff Could Render Export-Oriented Firms Uncompetitive
Banks may adopt a risk-averse approach and slow down fresh lending to export-oriented micro, small, and medium enterprises (MSMEs) to avoid stress in their portfolios after the US imposed a 25 percent tariff on goods imported from India.
Lenders may also ask for more collateral when extending credit to this segment, they added.
The asset quality of the MSME sector has remained stable so far. MSME lending outpaced credit growth in the retail and services sectors in FY25, rising by 14.1 percent amid an overall decline in bank credit.
A senior official at a state-owned bank, requesting not to be quoted, said around 45-50 percent of MSMEs were export-oriented, and lenders would now have to choose amongst MSMEs whether they are export-oriented or not.
This story is from the August 02, 2025 edition of Business Standard.
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