MSME Corporate lending has grown comparatively faster than Large Corporates in FY 18-19: MSME Pulse report
New Delhi, July 19 (KNN) In the Financial Year 2018-19, the Micro, Small and Medium Enterprise (MSME) Corporate lending has grown comparatively faster than the Large Corporates, according to MSME Pulse report.
Under the Commercial lending, loan taken by entities have been classified as MSME Corporate (<50Crs aggregate exposure) and Large Corporate (50Crs + aggregate exposure).
“As expected, MSME corporate lending has grown comparatively faster than Large corporates,” said the report prepared by TransUnion CIBIL and Small Industries Development Bank of India (SIDBI).
The report points that similar trend is evident in case of comparison with GDP.
Large Corporate debt as a proportion of GDP has changed from 22.8% to 24.5% from FY15 to FY19. MSME corporate debt to GDP ratio has increased to 9.3% from 8.2% in the same time period.
Total commercial lending debt by MSME and corporates are further observed across various states and reveals that overall commercial lending is skewed towards the metro cities. This is because of the concentration of Large corporates in Metros and Tier1 cities. Top five states in terms of balance accounts for 65% of total commercial balance.
The report noted, “It is quite evident that states with lower commercial debt also have low commercial debt/deposit ratio. Commercial debt/Deposit is highest for Telangana at 89% followed by Maharashtra at 74%. However, Commercial debt to GDP ratio is highest for Maharashtra at 106% followed by Delhi at 65%.”
Focusing on debt to MSME corporates only, the report highlights that the total debt distribution for MSME corporate is distributed across many states.
The report states that when loans are extended to MSME Entities, debt is distributed across many states.
Top 5 States in terms of MSME debt are Maharashtra (MSME balance share of 17.2%), Tamil Nadu (10.8%), Gujarat (9.1%), Delhi (7.7), and Karnataka (6.4%).
These top 5 states account for 51% of the total MSME debt. Next top 10 States account for 41% of the total MSME corporate lending.
If we look at the credit penetration, opportunity in Bihar, Uttar Pradesh & Odisha is very high.
The report stated that the “Leverage buildup is low for all the low ranking states having low debt/GDP and low debt to Deposit ratio.”
In terms of MSME Opportunity and Risk Ranking for the last 4 years, Gujarat has maintained the top position while Andhra Pradesh has moved from 15th rank in FY 16 to 2nd rank in FY19. Haryana has also improved from 9th rank in FY 16 to 3rd in FY 19.
Meanwhile, Punjab is at 18th, Odisha 19th, Goa 20th, Himachal Pradesh & Jharkhand 21st and North Eastern states 23rd.
In terms of 4 years rankings of MSME and Business Lending to Individual, Gujarat has maintained the top position followed by Tamil Nadu, Rajasthan, Delhi, Karnataka, Haryana and Maharashtra.
The bottom five states in this category are Chattisgarh, Odisha, Jharkhand, Goa, North East States.
This MSME Pulse Report (Report) is prepared by TransUnion CIBIL Limited (TU CIBIL). (KNN Bureau)