Banks curb MSME credit as loan growth stalls, early stress signs appear
MSME loan growth fell to 12.7% YoY in April 2026, down from 18‑20% in prior quarters, as banks tighten underwriting amid rising geopolitical risks. Delinquency rates nudged higher, especially in public sector banks, signalling emerging stress in the sector. The slowdown could pressure bank earnings and amplify credit‑cost concerns.