Donald Trump tariff impact: Banks likely to tighten lending to MSMEs

The Finance Ministry has warned that banks may adopt a "risk-averse approach and slow down lending to export-oriented MSMEs." The caution comes amid a slowing global economy and rising interest rates. The ministry is concerned that the MSME sector, which is a key contributor to India's exports, may face a credit crunch, thereby impacting its growth. The government is reportedly exploring measures to provide credit guarantees and other support to ensure a steady flow of credit to this crucial sector.