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Gujarat No 1 in credit to MSMEs; much scope for lending in Bihar, UP.

Published: July 22, 2019

Sustained growth in credit and a drop in NPA are promising indicators for MSME sector: Report

Gujarat has emerged the top performing State in extending credit to micro, small and medium enterprises (MSMEs), followed by Andhra Pradesh, Haryana, Karnataka and Delhi, according to a report. There was a 12.4 per cent year-on-year growth in credit in the quarter ending March 2019, said the report, ‘TransUnion CIBIL- SIDBI MSME Pulse’.

While Maharashtra stood first in terms of market size, Andhra Pradesh topped chart in market growth.

Commercial lending

The credit penetration is remained low in Bihar, Uttar Pradesh and Odisha and hence the opportunity to lend is very high in these States, the report said. The overall gross non-performing asset (NPA) in commercial lending was 16 per cent in March 2019 compared to 17.2 per cent during the same period last year. “The sustained growth in commercial lending along with lowering of NPAs is a very promising indicator of the MSME sector growth which plays a pivotal role in catalysing economic development,” said Mohammad Mustafa, Chairman and Managing Director, SIDBI.

The MSME Pulse ranking model looks at market size in terms of total credit exposure, accounts and consumers. “The State-wise performance insights throw significant light on the credit opportunity, potential of MSME growth and risk predictors across India. Gujarat has consistently ranked number one over the last four years (financial tear 2016 to 2019),” said Satish Pillai, Managing Director and CEO of TransUnion CIBIL.

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