Credit growth to MSMEs increase to INR 52,800 crores by mid-July FY23

In same period last year, the credit for the sector saw a de-growth of INR 61,000 crore

August 1, 2022

Retail loans during the period grew by INR 1.34 lakh crore

FY23 has recorded a 3-year high credit growth of 14% YoY

The incremental growth of credit for Micro, Small and Medium Enterprises (MSMEs) on a year-to-date (YTD) basis is 3.3%

An amount of INR 14.23 lakh crore was disbursed by banks for MSMEs in May 2022

India’s MSMEs receive key policy, funding push

Credit growth to the MSME sector increased by INR 52,800 crores by mid-July in FY23, according to a report titled ‘Ecowrap Report’ by SBI Research. During the same period last year, the credit for the sector saw a de-growth of INR 61,000 crore.

Retail loans during the period grew by INR 1.34 lakh crore, compared to INR 26,500 crore last year.

FY23 has recorded a 3-year high credit growth of 14% YoY, and has gained further traction over FY22. According to the report, the incremental growth of credit for MSMEs on a year-to-date (YTD) basis is 3.3% at INR 3.8 lakh crore.

According to data from the Reserve Bank of India about sectoral credit, gross bank credit allocated to Micro and Small Enterprises (MSEs) grew by 27% in May, compared to 19.7% during the previous month. 

Approximately INR 14.23 lakh crore was disbursed by banks for MSMEs in May 2022, compared to INR 11.20 lakh crore during the same month last year. The total credit spent on the MSME sector in May, April, and March stood at INR 17.81 lakh crore, INR 17.63 lakh crore, and INR 16.17 lakh crore in April, respectively. 

Experts said that non-food credit growth is double-digit and the bulk of the loan goes to micro and small enterprises (MSEs) and personal loans.

Until March this year, the government on the other hand with its Emergency Credit Line Guarantee Scheme (ECLGS) has supported over 11 million MSMEs and other businesses with collateral-free loans, since its launch in May 2020. About 2.3 million businesses were supported in FY22, compared to around 9.5 million businesses supported in FY21.

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