CHENNAI/MUMBAI: The GST fee reduce is driving MSMEs to hunt further funding from banks for enlargement. After the GST rejig, banks have seen a spike in enquiries for advances from the MSMEs. It comes amid lenders having moved nearer to their annual targets for the MSME phase within the first half of the present fiscal. For example, state-owned Indian Abroad Financial institution has recorded its MSME portfolio touching Rs 48,000 crore as of Sept 30, 2025, out of the overall goal of Rs 51,000 crore for the total monetary 12 months, a 16.7% improve YoY. Indian Abroad Financial institution’s MD & CEO Ajay Kumar Srivastava mentioned govt has taken a number of initiatives to speed up MSME progress, equivalent to their classification and turnover. Noting that the financial institution is prone to attain Rs 55,000 crore in its MSME portfolio this fiscal, he mentioned, GST can be one of many main elements. “We’re specializing in the manufacturing (within the MSME) sector,” he added.To focus on the high-growth MSME phase, the nation’s largest lender SBI has launched digital MSME loans. These loans provide MSMEs end-to-end sanctions in 45 minutes. The financial institution has processed practically 2.3 lakh such accounts with credit score limits of Rs 74,434 crore as much as Aug 2025. Indian Financial institution MD & CEO Binod Kumar mentioned, there was good traction from the MSMEs, with the YoY progress tripled from 5-6% to round 17% (FY25 vs FY26). “We’re seeing demand primarily from the providers sector, together with hospitality. It’s for his or her enlargement plans or organising new lodges each throughout pre- and post-GST 2.0. Main demand can be coming from the ancillary items. We are going to exceed our goal for MSMEs this 12 months,” he mentioned. PNB has launched a slew of merchandise, together with complete financing as much as Rs 100 crore, digital MSME loans allow paperless lending as much as Rs 25 lakh. The financial institution has additionally launched a totally digital MSME mortgage of as much as Rs 5 crore backed by CGTMSE assure and concessional charges.Bankers mentioned that one more reason for the thrust on MSME loans is that the brand new rules on anticipated credit score loss make it much less capital intensive for banks to lend to MSMEs.