SRINAGAR: Credit support to micro, small and medium enterprises (MSMEs) in Jammu and Kashmir through the Small Industries Development Bank of India (SIDBI) has witnessed a significant increase over the past five years, with sanctions rising to Rs 40.07 crore in 2025-26 from virtually negligible levels in 2021-22, according to the Union Finance Ministry.
The figures were shared in a written reply tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman in response to a starred question on credit flow to MSMEs.
According to the data, SIDBI sanctioned direct credit worth Rs 40.07 crore to six MSME units in Jammu and Kashmir during 2025-26, while disbursements stood at Rs 28.04 crore. The outstanding amount at the close of the financial year reached Rs 40.37 crore.
The figures indicate a gradual expansion in institutional lending to the Union Territory over the last five years. In 2024-25, six MSME accounts received sanctions amounting to Rs 7.58 crore, followed by Rs 3.85 crore across five accounts in 2023-24. During 2022-23, two MSME accounts were sanctioned Rs 7.85 crore, while no fresh sanctions were recorded in 2021-22.
The Finance Ministry said SIDBI has expanded MSME financing through direct and indirect lending, digital credit platforms, co-lending arrangements, micro-lending initiatives and cluster development programmes aimed at improving access to affordable finance for small businesses.
The reply also noted that the Centre launched the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 in May 2026. Under the scheme, eligible MSMEs can avail additional credit of up to 20 per cent of their peak fund-based working capital outstanding during the fourth quarter of 2025-26, with 100 per cent guarantee coverage provided to lending institutions. The government expects the scheme to facilitate an additional credit flow of Rs 2.55 lakh crore for MSMEs, non-MSMEs and scheduled passenger airlines.
