Credit and finance for MSMEs: Aggregate priority sector credit by banks to MSEs and medium units in March 2023 stood at Rs 19.69 lakh crore – 14.4 per cent of Rs 136.55 lakh crore non-food bank credit deployed across sectors.
Credit and finance for MSMEs: Bank credit to micro and small enterprises under priority sector loans in March 2023 grew by 14 per cent year-on-year (YoY) vis-a-vis 13.2 per cent YoY growth in March 2022, showed the latest monthly data on sectoral deployment of bank credit by the Reserve Bank of India (RBI). MSEs were deployed Rs 15.70 lakh crore in bank credit in March this year vis-a-vis Rs 13.77 lakh crore in March last year and Rs 15.61 lakh crore in February this year.
Credit to medium-sized enterprises also saw 13.4 per cent growth in March to Rs 3.99 lakh crore from Rs 3.51 lakh crore deployed in March last year. In February 2023, Rs 3.90 lakh crore was deployed to medium units.
Aggregate priority sector credit by banks to MSEs and medium units in March 2023 stood at Rs 19.69 lakh crore – 14.4 per cent of Rs 136.55 lakh crore non-food bank credit deployed across sectors – with 13.8 per cent growth from Rs 17.29 lakh crore deployed in March 2022.
Among other sectors eligible for priority sectors credit were agriculture and allied activities receiving Rs 17.08 lakh crore, housing receiving Rs 6.21 lakh crore, educational loans Rs 58,634 crore, renewable energy Rs 4,656 crore, social infrastructure Rs 2,464 crore, export credit Rs 15,696 crore, etc., in March 2023.
The demand for credit in the MSME sector, which stands at around Rs 20-25 lakh crore, as per a UK Sinha committee report in 2019, is a great opportunity for banks, according to RBI. “This has to be seen as an area of opportunity by the banks and other financial institutions,” RBI’s deputy governor M. Rajeshwar Rao had said addressing the 31st Annual Management Convention of Thrissur Management Association recently.
Rao had pointed towards the need for financial inclusion to be redefined by developing bespoke products and services that are best suited to different strata of society depending upon their income level. This shall include innovative solutions that make it easier for people to not only access basic but also to use a variety of financial services, he said.
Importantly, credit growth to MSMEs in the industrial sector in the post-Covid period was “distinctly higher” not only on a year-on-year basis but also in comparison with credit growth to large industries, according to the central bank’s December 2022 Report on Trend and Progress of Banking in India.