Loans to micro, small and medium enterprises (MSMEs) grew 21% year-on-year (y-o-y) in the quarter ended December 2018, according to a study by TransUnion Cibil, which also showed private banks and non-banking finance companies (NBFCs) gaining market share over public sector banks (PSBs). Most of the growth in Q3FY19 came from private banks and NBFCs, with their market shares in MSME loans rising 400 bps and 300 bps y-o-y, respectively. PSBs have been consistently losing their dominance in the market as their share came down to 39% in Q3FY19 from 58% in Q3FY14. However, experts say this could change in the months ahead. Kotak Institutional Equities (KIE) said in a note on Tuesday that PSBs could recoup some of the lost ground. \u201cGoing forward, we expect this trend to moderate as more PSU banks come out of the PCA (prompt corrective action) framework and the impact of liquidity issues show up in the numbers for NBFCs,\u201d the broking firm said. MSME lending, including loans to individual-led MSMEs, constituted 23% of all loans in India at the end of December 2018. It has been growing between 20% and 25% y-o-y in recent quarters. MSME loans to individuals recorded a 25% y-o-y growth in Q3FY19 and accounted for 41% of the aggregate MSME book of Rs 25.2 lakh crore. On the other hand, lending to entity-based MSMEs grew 16.5% y-o-y during the quarter under review. During the October 2017-March 2018 period, lending to new-to-credit (NTC) MSMEs surged 24% y-o-y in the Rs 100 lakh-Rs 10 crore segment. PSBs continue to control the under Rs 10-lakh segment, with a 78% market share in H2FY18.