The contribution of MSMEs to India's economic story is undeniable. The COVID-19 pandemic has had a severe impact on India's economy with MSMEs being the worst hit.

An analysis of the latest bank credit growth data from the Reserve Bank of India shows credit offtake in the MSME sector suffered a steep year on year contraction of 12.7 percent for June 2020 alone.

While loans to micro and small industries shrank 7.6 percent, for medium-sized industries they dipped by 9.4 percent.

The key catalyst to the MSME growth story is access to finance and access to formal credit in particular. The industry remains chronically underserved.

The World Bank estimates the current credit gap for Indian MSMEs is at $380 billion.

CNBC-TV18's Shereen Bhan spoke to Shreekant Somany, chairman of CII - National MSME Council, CMD at Somany Ceramics; Vaibhav Gupta, co-founder of Udaan and Rajat Verma, MD & head of commercial banking at HSBC India to discuss the ways to address the MSME financing gap.

Watch the video for more.

(Edited by : Abhishek Jha)