SME credit lending grows at 15.6% YoY; Gujarat top state for MSME lending

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Published: July 21, 2019 12:56:30 PM

While micro-enterprises saw credit growth at 19.8 per cent YoY to Rs 4.8 lakh crores, growth in credit for SMEs was at 15.6 per cent YoY to Rs 11.1 lakh crores.

SME, bad loan ratio, March quarter, Transunion Cibil and Small Industries Development Bank of India, Sidbi, industry news, MSME, NPA, RBIGujarat emerged as the top-ranking state for “performance and credit growth potential for MSME corporate lending in India.”

Credit growth to micro-businesses and small, medium enterprises (SME) constituted Rs 15.9 crore as of March 2019. While micro-enterprises (with credit exposure less than Rs 1 crore) saw credit growth at 19.8 per cent year-on-year (YoY) to Rs 4.8 lakh crores from Rs 4 lakh crores, growth in credit for SMEs (exposure between Rs 1-25 crore) was at 15.6 per cent YoY to Rs 11.1 lakh crores from Rs 9.6 lakh crores, according to a report by credit information company TransUnion Cibil. Total credit exposure as of March 2019 was Rs 116.7 Lakh crores with maximum share to corporate segment with 55 per cent with Rs 64.1 lakh crores exposure.

The non-performing assets (NPA) also declined with the overall gross NPA rate in commercial lending went down to 16.0 per cent in March this year from 17.2 per cent in March 2018, the report titled MSME Pulse said. “The sustained growth in commercial lending along with a marked lowering of NPAs is a very promising indicator of MSME sector growth,” Mohammad Mustafa, Chairman and Managing Director, SIDBI said in a statement.

The report noted Gujarat as the top-ranking state for “performance and credit growth potential for MSME corporate lending in India as per its ranking of states for MSME corporate lending.” Other states that topped in this segment following Gujarat were Andhra Pradesh, Haryana, Karnataka and Delhi. MSME corporate entities are defined basis the aggregate credit exposure up to Rs 50 crore. The market size of this category is Rs 17.6 lakh crore as of March 2019. The ranking was done across market size, market growth, delinquency, and score quality.

Andhra Pradesh ranked highest in the market growth in FY19 while Haryana and Karnataka got equal scores in MSME Ranking. Haryana, however, scored better in delinquency and score quality of consumers even as Karnataka, according to the report, is positioned well in market size and market growth. Delhi ranked top in low riskiness of MSMEs measured by better CIBIL MSME Rank of entities, the report added. Overall, Gujarat, Andhra Pradesh, Haryana, Karnataka, and Delhi were the top five states among the four parameters.

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