By Ananya Upadhyaya
Credit and Finance for MSMEs: The demand for MSME loans, which is measured as the number of commercial credit enquiries, as of Q4 FY22 has grown 1.6 times the pre-pandemic levels (Q4 FY20) on the back of improvement in broader economic activity after the second wave of pandemic and extension of the Emergency Credit Line Guarantee Scheme (ECLGS) scheme, said the latest MSME Pulse report by SIDBI and credit bureau TransUnion CIBIL. The availability of enriched credit data and higher adoption of digital lending also facilitated the sustained increase in credit demand, the report noted.
Meanwhile, the MSME segment’s credit exposure grew to Rs 23.12 lakh crores during Q4 FY22, up from Rs 21.8 lakh crore in Q4 FY21 and Rs 20.2 lakh crore in Q4 FY20 with outstanding balances increasing across lender types. For public sector banks, the outstanding balance jumped 6 per cent to Rs 9 lakh crore as of March 2022, while for private banks, it increased 13 per cent to Rs 9.4 lakh crore. For non-banking financial companies (NBFCs), the outstanding balance increased 7 per cent to Rs 2.7 lakh crore.
In terms of disbursement, the credit disbursed by lenders to MSMEs increased by around 43 per cent in Q4 FY22 from the year-ago period. Compared to the pre-Covid phase (Q4 FY20), MSMEs disbursements for all three segments had almost doubled in the Q4 FY22. “The total disbursements have been to the tune of Rs 8 lakh crore in FY21 and Rs 10.6 lakh crore in FY22. Disbursements in micro, small and medium segment increased YoY by 19 per cent, 33 per cent, and 38 per cent respectively from FY21 to FY22,” the report added.
In terms of lenders, disbursements by the public sector and private banks increased year-on-year 5 per cent and 14 per cent respectively while for NBFCs, disbursements declined by a negative 16 per cent in Q4 FY22.