Credit and finance for MSMEs: Bank credit to micro and small enterprises (MSEs) under the priority sector lending (PSL) mechanism has registered a year-on-year (YoY) growth of 23.2 per cent in September in comparison to minus 2.2 per cent in September last year, showed latest data from the Reserve Bank of India (RBI) on sectoral credit deployment by scheduled commercial banks. Rs 14.83 lakh crore were deployed to MSEs in September 2022 vis-a-vis Rs 12.04 lakh crore in September 2021 and Rs 12.31 lakh crore in September 2020, according to the data. In comparison, the YoY growth rate in August 2022 was 19.6 per cent, 19.2 per cent in July and 23.7 per cent in June.
For medium enterprises, the YoY growth in bank credit increased to 44.6 per cent in September vis-a-vis 27.9 per cent in September last year. The total credit to medium enterprises jumped from Rs 2.01 lakh crore in September 2020 to Rs 2.57 lakh crore in September 2021 and Rs 3.71 lakh crore in September this year. The August 2022 growth stood at 45.1 per cent while 49.1 per cent and 60 per cent growth was registered in July and June respectively.
Importantly, the YoY credit growth rate to medium enterprises in September was the second highest among priority sectors. The highest growth rate of 77.5 per cent was recorded in the renewable energy sector with Rs 3,750 crore bank credit in September 2022, up from Rs 2,112 crore during the year-ago period. Other priority sectors such as agriculture and allied activities saw 15.8 per cent credit growth while credit to the housing sector recorded 9.2 per cent growth. Weaker sections including small and marginal farmers saw 24.5 per cent growth.
Meanwhile, the aggregate credit to the MSME sector, including MSEs and medium enterprises, in September stood at Rs 18.55 lakh crore, up 27 per cent from Rs 14.61 lakh crore in September 2021. According to an SBI Ecowrap report in July this year, the incremental bank credit growth to MSMEs has seen an increase of Rs 2.7 lakh crores since March 2020 when the pandemic began, out of which ECLGS disbursements have been around Rs 2.36 lakh crore. In the current financial year, credit to the MSME sector has jumped from Rs 17.63 lakh crore deployed in April.
