MUMBAI: Late payments are putting pressure on working capital on MSMEs, with the average overdue dues of more than 360 days standing at around Rs 3.8 lakh crore per company and a national invoice payment cycle of 73 days, even as 82.6% of invoices are issued with credit periods ranging from 0 to 30 days, the report noted.
The Indian MSME Receivables Report 2026 is based on data from around 1.1 lakh MSMEs and over a million transactions. Payment delays persist despite SMEs offering short credit periods, indicating structural inefficiencies in collections and payment discipline, Recordnet said. MSMEs contribute about 30% to India’s GDP, account for 48% of exports, and remain the second largest employer after agriculture. Average receivables more than 360 days late reflect a significant amount of capital on hold, while a payment cycle of 73 days exceeds typical credit terms and highlights the gap between invoicing and cash realization. Regulatory guidelines recommend payment to MSMEs within 45 days, but actual timelines still exceed this limit. The report identifies late payments as a major obstacle to SMEs’ liquidity, growth and financial stability. The report notes that improving receivables management and payment discipline can unlock liquidity without additional borrowing.