Core Insights - The Standing Advisory Committee (SAC) meeting emphasized the need for improved credit linkage for the Micro, Small and Medium Enterprises (MSMEs) sector through cash-flow based lending and digital solutions like the Trade Receivables Discounting System (TReDS) [6][7]. Group 1: Credit Flow and Digital Solutions - The SAC reviewed the flow of credit to MSMEs and suggested the use of credit guarantee schemes to enhance credit penetration in the sector, which is vital for economic growth, employment, and industrial diversification [6][7]. - The deputy governor highlighted the importance of addressing challenges such as information asymmetry, financial literacy gaps, and delayed payments, advocating for the adoption of digital solutions and alternative credit assessment models [2][6]. Group 2: Contribution of MSME Sector - The MSME sector contributes approximately 30% to India's GDP and accounts for about 45% of the country's exports, underscoring its significance in the national economy [6][7]. Group 3: Initiatives and Stakeholder Engagement - The central bank's commitment to strengthening the credit ecosystem for MSMEs includes initiatives like the Unified Lending Interface (ULI), Account Aggregator framework, and Regulatory Sandbox, which facilitate data-driven and cash-flow based lending [6][7]. - Industry associations expressed concerns about the challenges posed by geopolitical uncertainties, and committee members assured that feedback and suggestions would be considered by relevant stakeholders [6][7].