Micro, Small, and Medium Enterprises (MSMEs) in India are gearing up for a robust festive season in 2026, with a notable shift in credit demand towards fast-moving consumer goods (FMCG), kirana stores, and ready-made garments. A report by FlexiLoans, the MSME Pulse – Festive Edition FY27, projects significant growth in loan inquiries across these sectors as businesses stock inventory in anticipation of increased consumer spending.
FMCG and Kirana Lead the Surge
The FMCG and kirana segments are expected to see the sharpest rise in festive-season credit demand, with loan inquiries projected to increase by 42% year-on-year during September-December 2026. This substantial growth is primarily driven by the need for frequent restocking, making working capital particularly sensitive to the seasonal demand. The report highlights that credit demand typically precedes the sales calendar by 30–45 days, allowing businesses ample time to prepare.
Strong Demand in Ready-Made Garments
Following closely, the ready-made garments sector is projected to experience a 38% growth in festive loan inquiries. This category already represents the largest industry by loan count on FlexiLoans, demonstrating its significant presence in the MSME lending landscape. The fashion consumption market is also expected to accelerate, growing by 20–22% from its previous 17%, with value apparel priced under ₹2,500 poised to benefit substantially from the festive consumption cycle.
Durables and Electronics Maintain Importance
While FMCG and garments lead, the durables and electronics category remains a crucial driver of credit demand, with a projected 31% increase in festive loan inquiries. However, the report indicates that electronics Gross Merchandise Value (GMV) growth may moderate to 15–17%, with its overall share slightly decreasing. A key factor influencing working capital needs in this sector is the prevalence of no-cost EMI options, which accounted for approximately 80% of electronics and appliance sales in 2025. This creates a cash-conversion gap for sellers until payments are settled, necessitating higher working capital even amidst strong consumer demand.
Other Sectors Also See Growth
Beyond the top three, several other MSME categories are also anticipating increased credit demand during the festive period:
- Mobile & Accessories: 26% projected rise in loan inquiries
- Jewellery: 24% projected rise
- Auto Ancillaries: 22% projected rise
- Pharmacy: 18% projected rise
The overall outlook suggests that festive borrowing is intricately linked to inventory turnover rates, profit margins, and the timing of consumer payments, with fast-moving consumer categories emerging as the primary engines of MSME credit demand in the upcoming festive season.