Income Stability Assessment examines whether the borrower’s income is steady enough to support repayment over the loan tenure. For MSMEs, income can fluctuate due to seasonality, customer concentration, delayed payments, commodity prices, or project-based work. The lender therefore checks sales history, bank credits, GST filings, order book, contracts, and profit margins rather than relying only on one year’s turnover. For example, a business with stable monthly collections from diversified customers may be safer than one with high annual sales concentrated in two irregular invoices. This assessment matters because unstable income can create EMI delays even when annual sales look adequate. The common mistake is to use average income without checking volatility, timing of receipts, and whether income is recurring or one-off.