Credit and finance for MSMEs: Priority sector credit to micro and small enterprises (MSEs) by scheduled commercial banks recorded a 17.4 per cent year-on-year (YoY) jump in November 2022 in comparison to only 1.6 per cent YoY growth in November 2021, showed the latest monthly data on sectoral deployment of bank credit by the Reserve Bank of India (RBI). The MSE credit increased from Rs 12.41 lakh crore in November 2021 to Rs 14.57 lakh crore in November 2022. The credit deployed in November was higher than the Rs 14.30 lakh-crore deployed to MSEs in the preceding month of October.
Loans to medium enterprises under priority sector lending also grew by 30.2 per cent YoY in November though down from 37.8 per cent in November 2021. Banks deployed Rs 3.69 lakh crore in November 2022 vis-a-vis Rs 2.83 lakh crore deployed in November 2021 to medium units. Importantly, November credit was at par with Rs 3.69 lakh crore deployed in the previous month of October.
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The total bank lending to the MSME sector, including credit MSEs and medium enterprises, in November, stood at Rs 18.26 lakh crore – 14.1 per cent of Rs 129.47 lakh crore overall gross bank credit deployed across sectors including food and non-food credit deployed during the month vis-a-vis Rs 15.24 lakh crore deployed in November 2021 – 13.6 per cent of Rs 111.62 lakh crore overall bank credit.
Among other sectors eligible for priority sector loans, agriculture and allied activities raised maximum loans amounting to Rs 16.31 lakh crore in November 2022, growing 15.3 per cent from Rs 14.14 lakh crore deployed in November 2021. Others including the housing sector raised Rs 6.13 lakh crore while educational loans amounted to Rs 58,887 crore, Rs 4,177 crore went to renewable energy units, Rs 2,394 crore to social infrastructure, Rs 15,506 crore towards export credit, etc.
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Meanwhile, credit growth to the MSME sector is likely to continue in the current fiscal from the previous year. The credit outstanding to the MSME sector had increased from Rs 16.13 lakh crore given to 384.18 lakh borrowers in FY20 to Rs 17.83 lakh crore to 420.19 lakh borrowers in FY21 and further to Rs 20.11 lakh crore to 264.67 lakh borrowers in FY22, according to the data shared by the MSME Minister Narayan Rane in the Rajya Sabha in a written reply to a question during the winter session.
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