New Delhi, Mar 1 (KNN) The credit to the Micro and Small Enterprises (MSE) sector declined by 7.4 per cent in January 2017 as compared to an increase of 2.4 per cent in January 2016, reveals RBI data.

According to Sectoral Deployment of Bank Credit – January 2017, Credit to industry as a whole contracted by 5.1 per cent in January 2017 in contrast with an increase of 5.6 per cent in January 2016.

Credit to Medium Enterprises in particular fell 10.2 per cent in January 2017 as compared to a fall of 7.1 per cent in January 2016.

Credit growth to major sub-sectors such as ‘infrastructure’, ‘food processing’, ‘basic metal and metal products’ and ‘textiles’ witnessed deceleration/contraction.

However, credit growth to ‘petroleum, coal products and nuclear fuels’, ‘vehicles’ and ‘construction’ accelerated.

Credit to the services sector increased by 8.1 per cent in January 2017 as compared with an increase of 8.9 per cent in January 2016.

The credit to MSE sector under priority sector lending too showed a fall of 0.4 per cent in January 2017 a compared to an increase of whopping 7.9 per cent in January 2016.

As per the International Financial Corporation (IFC), a ‘funding gap' of USD 2.1 to 2.6 trillion exists for all formal and informal MSMEs in emerging markets alone, which is equivalent to 30 to 36 per cent of current outstanding MSME credit. (KNN Bureau)