Proceedings of the International Conference on Policies, Processes and Practices for transforming Underdeveloped Economies into Developed Economies (PPP-UD 2025)

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The Impact of Credit Constraints on MSME Performance: Insights from the Financial Ecosystem of Delhi-NCR

Authors
Seema Joshi1, Bhawna Thakran2, *
1Department of Commerce, Kirori Mal College, University of Delhi, Delhi, India
2Department of Commerce, Delhi School of Economics, University of Delhi, Delhi, India
*Corresponding author.
Corresponding Author
Bhawna Thakran
Available Online 10 November 2025.
DOI
10.2991/978-94-6463-894-3_17How to use a DOI?
Keywords
MSME; Credit accessibility; Financial institutions; ICT; Digital lending; Financial inclusion; Delhi-NCR
Abstract

The financial ecosystem for Micro, Small, and Medium Enterprises (MSMEs) in India continues to face barriers that restricts their productivity, sustainability and growth. Despite good banking infrastructure in Delhi–National Capital Region (NCR), credit inaccessibility persists. This study investigates the credit accessibility challenges confronting MSMEs in Delhi-NCR, examining their effects on business performance, employment generation and innovation. Study assesses the role of financial institutions and Information and Communication Technology (ICT) solutions in bridging the credit gap. A mixed-method approach was employed, drawing on secondary data from the Ministry of MSME, National Bank for Agriculture and Rural Development (NABARD) and the Reserve Bank of India, along with national surveys. Descriptive statistics and interpretive analysis were used to examine the structural patterns with contextual realities. Findings reveal that a small proportion of total banking advances in Delhi are directed to MSMEs, even though the sector contributes significantly to India’s Gross Domestic Product (GDP) and employs millions. Further a large majority of non-agricultural enterprises in Delhi operate informally. Government schemes such as Micro Units Development and Refinance Agency (MUDRA) and Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) exist to ease collateral barriers, yet their utilization is hampered by low awareness and procedural hurdles. ICT-driven innovations offer potential solutions but face challenges of uneven adoption, digital literacy gaps and cybersecurity risks. The study highlights the urgent need for simplified lending processes, financial and digital literacy interventions and integrated policy frameworks that align traditional banking with fintech innovations to strengthen MSME financial inclusion in Delhi-NCR.

Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Policies, Processes and Practices for transforming Underdeveloped Economies into Developed Economies (PPP-UD 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
10 November 2025
ISBN
978-94-6463-894-3
ISSN
2352-5428
DOI
10.2991/978-94-6463-894-3_17How to use a DOI?
Copyright
© 2025 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Seema Joshi
AU  - Bhawna Thakran
PY  - 2025
DA  - 2025/11/10
TI  - The Impact of Credit Constraints on MSME Performance: Insights from the Financial Ecosystem of Delhi-NCR
BT  - Proceedings of the International Conference on Policies, Processes and Practices for transforming Underdeveloped Economies into Developed Economies (PPP-UD 2025)
PB  - Atlantis Press
SP  - 243
EP  - 255
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-894-3_17
DO  - 10.2991/978-94-6463-894-3_17
ID  - Joshi2025
ER  -