The gross non-performing assets (GNPAs) with respect to credit outstanding to MSMEs as of March 31, 2024, stood at Rs 1.25 lakh crore, down from Rs 1.30 lakh crore as of March 31, 2023, indicating year-on-year improvement in the asset quality. The GNPAs have declined from Rs 1.87 lakh crore as of March 2020 and Rs 1.54 lakh crore as of March 2022, according to the data shared by Shobha Karandlaje, Minister of State in the MSME Ministry in a written reply to a question in the Lok Sabha.
The outstanding advances to MSMEs have increased from Rs 16.97 lakh crore as of March 2020 to Rs 23.92 lakh crore as of March 2023 and Rs 28.04 lakh crore as of March 2024.
Consequently, the share of GNPAs as a percentage of credit to MSMEs has dropped from 11.03 per cent as of March 2020 to 7.58 per cent as of March 2022 and 4.46 per cent as of March 2024.
“As per the information given by Reserve Bank of India (RBI), the number of cases classified as NPA for scheduled commercial banks for period ending March 31, 2023 and March 31, 2024 is 41,06,379 and 44,62,386, respectively,” Karandlaje said in her response.
Importantly, scheduled commercial banks had written off Rs 20,261 crore in bad loans linked to micro and small enterprises (MSEs) in industry (Rs 8,194 crore loans) and services sectors (Rs 12,067 crore loans) in FY24, down from Rs 28,392 crore written off in FY23, according to the data shared by the Minister of State in the Ministry of Finance Pankaj Chaudhary in the Rajya Sabha in July this year.
The five-year data showed Rs 20,055 crore MSE loans by scheduled commercial banks written off in FY20 in comparison to Rs 15,661 crore in FY21 and Rs 24,239 crore in FY22. Overall, Rs 1,08,608 crore MSE loans were written off by scheduled commercial banks in the last five financial years including Rs 43,789 crore to industrial MSEs and Rs 64,819 to services MSEs.
Lender-wise, public sector banks (PSBs) had the higher share of MSE loans written off. Between FY20 and FY24, PSBs wrote off Rs 73,358 crore of MSE loans, compared to Rs 32,098 crore of MSE loans written off by private banks.
On the other hand, foreign banks had written off Rs 1,013 crore MSE loans from FY20 till FY24.