Lending major SBI's Chairman Rajnish Kumar on Saturday said the new definition of MSMEs which includes both turnover and investment limits will lead to improved credit flow to the sector.

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He was speaking at the dialogue session organised by the Confederation of Indian Industry on the occasion of 'International MSME Day'.

During the session, he interacted with various representatives from the MSME industry through a virtual platform.

Highlighting the importance of the sector, the SBI Chairman said that they have vast outreach and play a critical role both in terms of economic activity and employment generation.

At the same session, CII President and MD & CEO of Kotak Mahindra Bank, Uday Kotak said that MSMEs need risk capital to grow.

Besides, Kumar said that the credit guarantee scheme for MSMEs under the 'Aatma Nirbhar Bharat' will reduce the pain of the sector, which has come under stress in the aftermath of Covid-19 induced crisis.

On the issue of financing, he said that SBI is the largest lender to the sector and is increasingly utilising digital technology platforms to enable hassle free credit flow to the MSME industries.