Maharashtra's NBFCs Poised for Expanded Role in MSME Financing
Maharashtra's non-banking financial companies are set to enhance their involvement in financing MSMEs and climate initiatives, according to MITRA's Joint CEO.
NBFCs are crucial for financing Maharashtra's MSMEs and climate finance.
Improved data infrastructure will aid lenders in assessing risks and credit access.
Innovative financial products and technology can mobilize private capital for growth.
On October 31, 2026, Aman Mittal, Joint CEO of the Maharashtra Institution for Transformation (MITRA), emphasized the increasing role of non-banking financial companies (NBFCs) in financing micro, small, and medium enterprises (MSMEs) in Maharashtra. He noted that as the state aims to achieve a USD 1 trillion economy, substantial private investment will be critical, with public funding expected to cover only a minor portion of the financial needs.
Mittal pointed out that enhancing resilience within the MSME sector and improving access to credit for businesses facing unique risks are significant challenges. He argued that NBFCs are better equipped to navigate these challenges due to their ability to operate in niche markets and their understanding of risks that traditional banks may overlook. This adaptability positions them well to fill the gaps in financing that MSMEs currently face.
To facilitate better credit access, Mittal discussed the development of state business registers and vulnerability maps. These tools aim to provide lenders with high-quality information regarding businesses and their associated risks. By making relevant non-personal public data available to financial institutions, lenders can more effectively evaluate borrowers and tailor their lending strategies to support those who might otherwise struggle to secure formal credit.
Furthermore, Mittal highlighted the importance of innovative financial mechanisms such as parametric insurance, tokenization, and smart contracts. These tools can help pool and transfer risks, thereby reducing reliance on physical collateral and enhancing capital access for MSMEs. Such innovations are particularly pertinent for financing climate-related projects and the transition needs of various businesses.
Mittal urged NBFCs to broaden their focus beyond traditional lending and explore opportunities in transition finance and innovative financial products. He believes that technology-driven lending and improved risk-sharing frameworks could mobilize private capital for MSMEs, aligning with Maharashtra's broader economic and developmental goals.
