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Loan disbursements to MSME sector grew 24% in Q2FY23: TransUnion CIBIL-SIDBI Report

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Loan disbursements to MSME sector grew 24% in Q2FY23According to a TransUnion CIBIL-SIDBI MSME Pulse Report 2023, loan disbursements to the micro, small and medium enterprise (MSME) sector in Q2 (July-September) FY23 grew 24% year-on-year (y-o-y), with significant growth in the micro segment.

  • Micro, small and medium segments saw a growth of 54%, 23% and 8% in disbursements, respectively.


i.The total MSME credit exposure as of Q2FY23 is at Rs 22.9 lakh crores, reflecting a YoY growth rate of 10.6%.

ii.Credit to the micro (with aggregate credit exposure not exceeding Rs 1 crore) segment by balance grew by 13% y-o-y as of Q2FY23 and the disbursements to the micro segment of MSME grew by 54% YoY.

  • Very small (with aggregate credit exposure not exceeding Rs 10 lakh) experienced growth of 20% y-o-y.
  • Micro1 (with aggregate credit exposure between Rs 10-50 lakh) grew 15% y-o-y.
  • Micro2 (with aggregate credit exposure between Rs 50 lakh-1 crore) had a growth of 11% y-o-y.

iii.93% of MSME entities are in the micro segment which contributes 25% to the MSME portfolio.

v.Overall, MSME NPA (non-performing asset) rates (90 + days past due/DPD) was 12.5% as on Q2FY23, down from 13.9% as compared to Q2FY22.

vi.Delinquency rates dropped y-o-y across all the three lender categories (public sector banks/PSBs, private sector banks/PVBs and NBFCs (Non-Banking Finance Companies).

  • The highest drop was in PVBs segment from 2.8% in FY22-Q2 to 1.5% in Q2FY23.
  • For PSBs, delinquency rates dropped from 5.3% in Q2FY22  to 3.9% in Q2FY23 and for NBFCs from 5.9% to 4.5% during the same period.

vii.As per the analysis of credit exposure, PSB holds Rs 7.9 lakh crore, PVBs holds Rs 10.1 lakh crore, and NBFCs account for Rs  3.1 lakh crore of share.

viii.MSME disbursements by amount in Q2FY23 for PSBs, PVBs and (NBFCs)grew by 21%, 25% and 34%, respectively.

ix.The top ten States based on current outstanding MSME lending balances are Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh, Delhi, Karnataka, Rajasthan, West Bengal, Telangana & Haryana.

  • These top ten States constituted 72% of the MSME outstanding balance as of September 2022.

x.It should be noted that around 10% portion of the MSME credit exposure has been from legacy accounts with loans overdue beyond 720 days or reported as loss or doubtful accounts that continue to show MSME as a high-risk business.

  • Out of Rs 25.4 lakh crore of credit exposure as of Q2 FY23, Rs 1.3 Lakh crore was against 720 days past due or doubtful accounts and Rs 1.2 lakh crore against loss accounts.

About MSME Pulse Report:

It was launched in 2018 by SIDBI (Small Industries Development Bank of India) in association with TransUnion CIBIL. It is a quarterly report on MSME credit activity, for closely tracking and monitoring the MSME segment in India.

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About Small Industries Development Bank of India (SIDBI):

Chairman & Managing Director– Sivasubramanian Ramann
Headquarters– Lucknow, Uttar Pradesh
Establishment– 1990