Out of the total priority credit to the MSME sector in August, credit to micro and small enterprises (MSEs) grew by 18.9 per cent to Rs 17.18 lakh crore from Rs 14.44 lakh crore in August 2022. (Image: pixabay)
Bank credit to MSMEs: The gross bank credit deployed in August 2023 to micro, small and medium enterprises (MSMEs) under priority sector lending by scheduled commercial banks stood at Rs 21.26 lakh crore, up from Rs 20.86 lakh crore deployed in July. The August deployment was 14.2 per cent of India’s Rs 149 lakh crore non-food credit during the month vis-a-vis 14.1 per cent of Rs 147.8 lakh crore non-food credit during July this year.
Out of the total priority credit to the MSME sector in August, credit to micro and small enterprises (MSEs) grew by 18.9 per cent to Rs 17.18 lakh crore from Rs 14.44 lakh crore in August 2022. Likewise, credit to medium enterprises in August jumped by 11.5 per cent to Rs 4.08 lakh crore from Rs 3.65 lakh crore during the year-ago period. The growth comes amid major public sector banks looking to enhance their exposure to MSMEs including SIDBI and SBI which are expected to extend nearly Rs 1 trillion loans to MSMEs each on the back of schemes such as Mudra, PM SVANidhi and ECLGS, FE had reported in September. Moreover, other banks such as Bank of Baroda and Union Bank of India are likely to enhance their MSME loan portfolios by 10 per cent – 14 per cent, respectively.
On the other hand, the gross non-performing assets (GNPAs) in MSME bank loans had dropped by 14.3 per cent to Rs 1.31 lakh crore for the financial year 2022-23 from Rs 1.54 lakh crore during FY22, according to the data shared by Bhanu Pratap Singh Verma, Minister of State in the MSME Ministry in a written reply to a question in the Rajya Sabha earlier.
In fact, GNPAs during FY23 were the lowest in the past five years, peaking at Rs 1.83 lakh crore in FY20 from Rs 1.63 lakh crore in FY19 and declining to Rs 1.82 lakh crore in FY21 before shrinking to Rs 1.31 lakh crore in the previous fiscal.
