Credit and finance for MSMEs: The demand for MSME loans during Q2 FY23 in terms of the number of commercial credit inquiries has grown by nearly 1.7 times the demand two years ago, said the latest edition of the SIDBI-TransUnion CIBIL MSME Pulse report. The growth has come on the back of efforts by the government and financial sector to develop and implement multiple support mechanisms, and an evolving digital public infrastructure for the MSME sector, the report said.
Lender-wise, credit demand grew by 1.9x and 1.6x as of September 2022 over two years for public sector banks and private banks respectively. For NBFCs, the demand grew by more than 2x for the same period.
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“Demand for credit from the MSME sector is at an all-time high and supply by the credit industry remains stable while delinquencies have declined. These findings prove that the credit industry has been able to wield the power of insights and data analytics to identify deserving MSMEs and drive access to credit opportunities astutely across business sectors and geographies,” said Rajesh Kumar, said Managing Director and CEO, TransUnion CIBIL in the report.
In terms of disbursements by amount, credit to the MSME sector in FY23 Q2 jumped by 24 per cent to Rs 2.16 lakh crore from Rs 1.74 lakh crore in FY22 Q2. The micro segment reported 54 per cent growth in disbursements from Rs 37,000 crore as of FY22 Q2 to Rs 57,000 crore as of FY23 Q2, “reaffirming the increased inclusivity focus in the market,” the report said.
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Disbursements in small and medium enterprises reported 22.8 per cent (from Rs 70,000 crore to Rs 86,000 crore) and 8.9 per cent (from Rs 67,000 crore to Rs 73,000 crore) growth respectively. Disbursements by amount in FY23 Q2 for public banks, private banks and NBFCs increased by 21 per cent, 25 per cent and 34 per cent, respectively compared to FY22 Q2.
Meanwhile, the total bank credit deployed to the MSME sector under priority sector credit in January 2023 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, according to the Reserve Bank of India
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