In a strategic move aimed at deepening financial inclusion and empowering India’s micro, small, and medium enterprises (MSMEs), IndusInd Bank Ltd. has signed a Memorandum of Understanding (MoU) with the National Small Industries Corporation (NSIC). The partnership, formalized on August 11, 2025, in New Delhi, is part of NSIC’s broader MSME Credit Facilitation Program, which seeks to streamline access to formal finance for small businesses across the country.
This collaboration marks a significant milestone in India’s ongoing efforts to bridge the credit gap for MSMEs, which continue to be the backbone of the economy, contributing nearly 30 percent to GDP and employing over 110 million people.
Key Takeaways from the MoU Signing
The MoU was signed between NSIC and IndusInd Bank, alongside other private sector banks, including Axis Bank and AU Small Finance Bank
The initiative is designed to enhance the availability, affordability, and accessibility of credit for MSMEs
NSIC will provide free handholding support to MSMEs, assisting with documentation, loan applications, and coordination with banks
IndusInd Bank will offer customized credit products tailored to the diverse needs of MSMEs, including working capital, term loans, and equipment financing
Strategic Objectives and National Impact
Expanding Formal Credit Access
The partnership aims to bring more MSMEs into the formal financial ecosystem, reducing dependence on informal lenders
By leveraging NSIC’s outreach and IndusInd Bank’s product suite, the program will target underserved regions and first-time borrowers
The initiative is expected to be a force multiplier in reaching the last mile, especially in Tier 2 and Tier 3 cities
Supporting Government-Led Schemes
The MoU aligns with key government programs such as the Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE) and the Pradhan Mantri MUDRA Yojana
It complements the objectives of the Udyam registration framework, which aims to formalize and digitize MSME operations
The collaboration also supports the Ministry of MSME’s goal to increase credit flow by 20 percent year-on-year
Operational Framework and Execution Model
NSIC will act as a facilitator, guiding MSMEs through the loan application process and ensuring compliance with bank requirements
IndusInd Bank will deploy dedicated relationship managers and digital onboarding tools to accelerate loan disbursal
The bank will also integrate credit scoring models and alternate data analytics to assess borrower profiles more effectively
Joint outreach programs, including financial literacy camps and credit clinics, will be conducted in partnership with NSIC
Leadership Commentary and Institutional Support
The MoU was exchanged in the presence of key dignitaries, including Shri Jitan Ram Manjhi, Union Minister of MSME, and Shri S.C.L. Das, Secretary (MSME)
Senior officials from NSIC and IndusInd Bank, including Dr. S. S. Acharya (CMD, NSIC) and Gaurav Gulati (Director, Finance), participated in the signing ceremony
The collaboration reflects a shared commitment to inclusive growth, entrepreneurship development, and job creation
Forward Outlook and Market Implications
IndusInd Bank is expected to onboard over 50,000 MSME clients through this program in the next 12 months
The bank’s MSME loan book, currently at ₹38,000 crore, is projected to grow by 18–20 percent in FY26
Analysts view the MoU as a positive catalyst for IndusInd’s retail and SME lending strategy, especially amid rising demand for collateral-free credit
The initiative may also improve the bank’s ESG credentials, given its focus on financial inclusion and social impact
Conclusion
The IndusInd Bank–NSIC MoU is more than a formal agreement—it’s a blueprint for inclusive economic development. By combining institutional expertise with grassroots outreach, the partnership promises to unlock new opportunities for India’s MSMEs, driving innovation, employment, and resilience in a rapidly evolving financial landscape.
Sources: Press Information Bureau, NSIC Official Website, BankExamsToday
