Credit and finance for MSMEs: Gross bank credit deployed to micro and small enterprises (MSEs) under priority sector loans by scheduled commercial banks jumped 15.2 per cent year-on-year (YoY) in January 2022 vis-a-vis 7.6 per cent YoY growth in December 2021, according to the latest monthly data on sectoral deployment of bank credit by the Reserve Bank of India (RBI). MSEs were deployed Rs 15.34 lakh crore in bank credit in January this year vis-a-vis Rs 13.31 lakh crore in January last year and Rs 15.26 lakh crore in December 2022.
On the other hand, credit to medium-sized enterprises grew by 17.3 per cent YoY in January 2023 to Rs 3.93 lakh crore from Rs 3.35 lakh crore deployed in January 2022 while Rs 3.86 lakh crore were deployed in December 2022. The total bank credit deployed to MSEs and medium enterprises in January stood at Rs 19.27 lakh crore – 14.4 per cent of Rs 133.4 lakh crore overall bank credit deployed across sectors –with 15.6 per cent growth from Rs 16.66 lakh crore deployed in January 2022.
Also read: Banks’ GNPAs in MSME loans decline to Rs 1.54 lakh crore: MSME ministry
Other priority sectors receiving maximum bank credit in January 2023 were agriculture and allied activities with Rs 16.56 lakh crore deployed, up 15.2 per cent from Rs 14.38 lakh crore deployed in January 2022 while housing sector raised Rs 6.14 lakh crore, educational loans amounted to Rs 59,250 crore, Rs 4,617 crore went to renewable energy units, Rs 2,499 crore to social infrastructure, Rs 14,390 crore towards export credit, and more.
Notably, the gross non-performing assets (GNPAs) of the MSME sector with banks during the last five years had dropped, indicating improved asset quality. According to the data shared by the minister of state for MSMEs Bhanu Pratap Singh Verma in the Lok Sabha in February, MSME GNPAs had declined by 5.1 per cent from Rs 1.63 lakh crore during the financial year 2017-18 to Rs 1.54 lakh crore during FY22 after increasing to Rs 1.82 lakh crore amid the Covid pandemic during FY21.