New Delhi, Nov 5 (KNN) In the current financial year for the month of September, monthly growth in credit to industry has turned positive by Rs 9,700 crore out of which Rs 8,200 crore is accredited to the Micro Small and Medium Enterprises (MSME) sector with a 6.2 per cent year-on-year growth though down from 9.5 per cent in September 2018, says an SBI report.

According to SBI Ecowrap report, the credit flow in April this year to MSMEs stood negative at Rs 1,200 crore. Overall “credit growth has picked up rapid pace beginning September 2019 jumping by Rs 1.08 lakh crore, courtesy, Housing, NBFC and lately MSME.”

The Reserve Bank of India (RBI) in October bulletin had said that the growth in credit to the MSME sector has contracted by 3.85 per cent in the current FY, while the shrinkage in the micro and small enterprises (MSE) was higher than that in the medium enterprises. For MSEs, the amount shrunk 4.4 per cent from Rs 3.75 lakh crores in March 2019 to Rs 3.58 lakh crores in August 2019. For medium businesses, it contracted by 1.8 per cent.

In August, Finance Minister Nirmala Sitharaman had asked banks to not declare stressed loan account of MSMEs as non-performing assets (NPA) till March 31, 2020, and instead suggested recasting MSME loans even if more credit is to be given to the MSME.

According to the RBI data, Public sector banks total credit outstanding to MSMEs went up marginally by 7.38 per cent from Rs 8.20 lakh crore in FY16 to Rs 8.81 lakh crore in FY19, while for FY17 and FY18, the amount stood at Rs 8.28 lakh crore and Rs 8.64 lakh crore respectively.

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