Gearing Ratio Breach refers to event where gearing or debt-equity ratio exceeds approved policy, covenant, or sanction threshold. It indicates rising leverage and potential solvency stress. In MSME credit, it converts borrower behaviour, financial signals, compliance gaps or business dependencies into a clearer risk view for approval and monitoring. For example, repeated non-compliance with stock statements, financial covenants or security conditions may signal weak discipline before an account becomes overdue. It matters because it helps the lender decide whether to proceed, add conditions, seek mitigants, reduce exposure or monitor the account more closely. The common mistake is to treat the indicator as a final decision by itself; it should be supported by evidence, trend analysis and credit judgement.