Axis Bank is positioning for a significant expansion in its small business lending book, anticipating a portfolio growth of approximately ₹10,000 crore under the newly launched ECLGS 5.0 scheme.
The bank views the updated government guarantee framework as a catalyst to accelerate credit disbursement to micro, small, and medium enterprises (MSMEs), a segment that has shown resilient demand despite broader economic headwinds.
The ECLGS 5.0 scheme introduces enhanced credit guarantee coverage, offering 100 per cent protection for MSMEs and 90 per cent for non-MSME borrowers.
This structural change effectively de-risks the lending process for banks, allowing them to extend credit with greater confidence and potentially more favorable terms for borrowers.
For Axis Bank, this translates into a clear pathway to scale its MSME franchise without proportionally increasing its risk-weighted assets.
This move aligns with a broader trend among Indian private lenders to deepen their penetration in the MSME segment.