How NSE’s Ashish Chauhan Became the Unsung Architect of the MUDRA Revolution

In a recent tribute before the nation’s political and financial elites, Union Law Minister Arjun Ram Meghwal publicly credited Ashish Chauhan, Managing Director & CEO of the National Stock Exchange (NSE), for playing a pivotal behind-the-scenes role in conceiving the MUDRA scheme. While the MUDRA scheme is often associated with credit outreach to micro and small businesses, this acknowledgment sheds new light on how capital markets leadership is quietly shaping India’s MSME credit infrastructure.

From Capital Markets to Credit Inclusion

Ashish Chauhan is best known for steering the NSE through phases of technological innovation, regulatory transitions, and platform expansion. Under his leadership, NSE has been instrumental in democratizing access to equity markets, especially for smaller enterprises and emerging firms. His track record in market design, exchange-based infrastructure, and stakeholder coordination made him a natural contributor to policy brainstorming on MSME financing.

According to Meghwal’s remarks, Chauhan’s inputs helped refine the conceptual framework of MUDRA — the government’s flagship initiative to extend collateral-free credit to millions of micro and small businesses. His understanding of risk, scalability, and capital access bridges the realm of financial markets and the world of grassroots credit.

Why This Matters for MSMEs

1. Bridging Formal and Informal Credit Gaps
   MSMEs often operate in informal credit ecosystems, where lenders demand high collateral or charge steep interest rates. MUDRA’s design — combining low-ticket lending, standardized risk assessment, and outreach via banks and NBFCs — needed the perspective of capital-market insiders to ensure sustainability without systemic risk.

2. Embedding Market Discipline in Credit Programs
   Schemes like MUDRA risk moral hazard if fiscal subsidies or defaults dominate the landscape. Chauhan’s involvement likely introduced market-calibrated credit discipline — guardrails around credit underwriting, monitoring, and exit — elements familiar to stock exchanges and financial markets.

3. Signal to Private Sector & Investors
   When the leader of a top stock exchange is credited with contributing to MSME credit policy, it signals an alignment between public finance and private capital markets. That alignment helps draw more investor attention, institutional funding, and transparency into the MSME credit space.

4. Encouraging Innovation in MSME Financing Models
   With ideas flowing from capital markets to credit schemes, there is potential for more hybrid financings—e.g., tradeable micro-bonds, securitization of small business loans, market-linked credit instruments. The insight of someone like Chauhan can accelerate such integration.

Risks & Challenges Ahead

While the linkage is promising, translating design into execution is a complex task. MUDRA’s performance has been mixed: defaults, misuse, under-penetration in remote regions, and varying impacts across states are documented concerns. A design aided by market thinking must still contend with regulatory, institutional, and ground-level implementation bottlenecks.

Furthermore, the credit-oriented mindset of bankers and NBFCs doesn’t always align with the return expectations and risk frameworks of capital markets. Sustaining coherence across these domains will require ongoing policy attention and institutional embedding.

The Bigger Picture for MSME Financing

The acknowledgment by the Law Minister is more than symbolic. It reflects a gradual reconvergence of India’s capital markets and its MSME credit architecture. For MSMEs, this could mean better-tailored financial products, more investor interest, and stronger visibility for small businesses as creditworthy entities.

If the capital markets and credit worlds walk this integration path prudently, it could transform how growth capital reaches India’s micro and small enterprises — turning schemes into scalable, sustainable engines of economic inclusion.

Reference: Meghwal’s tribute to Chauhan’s role in the MUDRA scheme concept was reported by PTI.