New Delhi, July 19
The Indian credit market is witnessing some structural shifts with headline bank credit growth and micro, small and medium enterprises (MSME) credit has bucked the overall headline trend in credit growth, according to an SBI report.
An increased supply of credit to existing borrowers has been observed, with the MSME sector witnessing a notable improvement in balance sheet serious delinquencies — measured as 90 to 120 days past due (DPD) and reported as ‘sub-standard’, which has dropped to a five-year low of 1.8 per cent.
This improvement, particularly among borrowers with exposures ranging from Rs 50 lakh to Rs 50 crore, marked a 35 basis points decline from the previous year, according to Dr Soumya Kanti Ghosh, Group Chief Economic Advisor, State Bank of India.
There has been a definition change for the MSME sector wherein, as an example, for medium enterprises the turnover limit has been increased to Rs 500 crore. Thus, it is possible that MSME credit growth could be enlarged even further, Ghosh mentioned in the report.
The formalization of MSMEs with the help of URN seeding is giving necessary fillip to the MSME credit growth. Udyam registration number (URN) is a permanent identification number for businesses looking to register themselves under the MSME definition and to seek the guarantee cover.
Till June 27, a total of 2.72 crore registration has been done through Udyam Assist Platform.