Delayed Payments Cripple MSMEs: ₹3.83 Crore Stuck Per Unit, Study Finds
A new study has revealed that delayed payments continue to severely constrain the cash flows and growth ambitions of small businesses across India. The 'Indian SME Receivables Report 2026', released by credit risk platform Recordent, draws insights from nearly 1.1 lakh micro, small, and medium enterprises (MSMEs) and analyses over 10 lakh transaction-level data points.
The report found that while most businesses offer conservative and short credit periods, collections are frequently delayed beyond payment terms, leading to significant working capital pressures. On average, an MSME carries approximately ₹3.83 crore in receivables that remain unpaid for more than 360 days. This underscores the scale of locked-up capital affecting liquidity and financial stability.
Indian SMEs take an average of 73 days to pay invoices, highlighting the need for stronger receivables management, improved payment discipline, and better access to working capital. Although government regulations encourage payments to MSMEs within 45 days, businesses are extending relatively short credit periods. In fact, 82.6% of invoices are issued with credit terms of 0–30 days, indicating that the challenge lies not in credit policies but in payment discipline and collections efficiency.
Winny Patro, co-founder and CEO of Recordent, stated, 'Delayed payments continue to quietly erode the growth potential of MSMEs. The findings demonstrate that payment delays have evolved into a broader credit and cash-flow challenge that impacts business resilience, borrowing capacity, and long-term competitiveness. Greater transparency, stronger credit governance, and wider adoption of receivables intelligence solutions can be a game changer.'
