Credit and Finance for MSMEs: Year-on-year (YoY) development in gross financial institution credit score deployed to micro and small enterprises (MSEs) noticed a big bounce of 27 per cent in May from 19.7 per cent in April, current knowledge on sectoral deployment of financial institution credit score by the Reserve Bank of India (RBI) confirmed. Banks disbursed Rs 14.23 lakh crore in May 2022 from Rs 11.20 lakh crore in May 2021. In April, Rs 14.08 lakh crore was deployed to MSEs from Rs 11.77 lakh crore in April 2021. YoY development in financial institution credit score to MSEs has been surging since December 2021, indicating the negligible influence of the third Covid wave after declining for 3 straight months from September to November.
“MSME sector, which was hit hard by the pandemic, is showing signs of revival (with) aggregate credit to the sector witnessed a strong revival during Q4 2021- 22 supported by significant growth in lending by private banks,” RBI stated in its newest Financial Stability Report launched earlier this week.
“The upsurge of domestic demand and pick up in ancillary industries and service units has increased funding requirement of this sector, which provides employment to a large section of the population,” the report famous.
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YoY development in credit score to medium enterprises stood at 64.8 per cent in May 2022 to Rs 3.57 lakh crore from Rs 2.16 lakh crore through the year-ago interval. In comparability, Rs 3.54 lakh crore was deployed to medium companies in April, up 65 per cent from Rs 2.15 lakh crore in April 2021.
The total credit score deployed to the MSME sector in May stood at Rs 17.81 lakh crore vis-a-vis Rs 17.63 lakh crore deployed in April and Rs 16.17 lakh crore in March. Meanwhile, MSMEs’ share in India’s gross financial institution credit score of Rs 120.27 lakh crore additionally elevated marginally to 14.80 per cent in May from 14.75 per cent share in April’s gross financial institution credit score of Rs 119.54 lakh crore.
Credit development to different sectors together with agriculture, housing, renewable power, and so on., beneath precedence sector lending, was additionally constructive in May whereas academic loans, social infrastructure, and export credit score recorded adverse development.
Source: www.financialexpress.com”