Accessing business loans can be challenging for small businesses, often facing high-interest rates and processing fees from banks and NBFCs. Recognizing the crucial role of MSMEs in the economy, the government has focused on enhancing financial access. However, MSMEs face various challenges such as delayed payments, loan defaults, asset-based lending, increased borrowing costs, and liquidity issues. The government has classified MSMEs as eligible for priority sector advances to support population-impacting sectors, weaker sections, and employment-intensive industries like agriculture. The Reserve Bank of India mandates domestic banks to allocate 7.5% of their ANBC to priority sector lending, linking loans to external benchmarks and promoting transparency. Udyam-registered enterprises benefit from cheaper bank loans, with scheduled commercial banks increasing priority sector lending to MSMEs, contributing 14.3% of India's non-food credit in September.