The Non-performing assets (NPAs) from the small businesses segment have witnessed a decline in the September quarter of this fiscal despite high credit growth, a report said on Thursday.
The micro, small and medium enterprises’ (MSME) NPAs declined to 12.5 per cent as of September 2022, as against 13.9 per cent in September 2021, after the devastating second wave of the Covid-19 pandemic, the report by Transunion Cibil said.
The overall disbursements, which excludes loan renewals, grew 24 per cent during the quarter, led by an over 54 per cent in the micro industries segment which have a credit exposure of up to Rs 1 crore, the credit information company said.
The average loan size for the micro segment increased by 34 per cent, and to the small segment by 4 per cent, Cibil said, adding that the same was down 1 per cent in the case of businesses classified as medium primarily because of the emergency credit-linked guarantee scheme loans made during the pandemic.
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When it comes to credit demand from the MSME segment, which is very crucial for the economy as it supports a bulk of the jobs and has big contributions to the GDP and also exports, there was high activity, the CIC said.
Demand for MSME loans, which is measured in terms of the number of commercial credit inquiries, accelerated to about 1.7 times the demand of two years ago during the pandemic, Cibil said.
The total MSME exposure for lenders was up by 10.6 per cent at Rs 22.9 lakh crore as of September 2022, the CIC said, adding that this excludes Rs 2.5 lakh crore of loans which it classifies as doubtful and the ones in loss category because they have not been paid for over 720 days.
As of now, the top-10 states account for nearly three-fourths of the overall credit to MSME, the company report said. Gujarat saw the maximum growth at 15 per cent, while states like Maharashtra, Karnataka, Delhi and Tamil Nadu were between 6-8 per cent growth in portfolio.
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