MSME Loan Portfolio Grows 17.8% to Rs 64.1 Trillion by March 2024: Report

New Delhi, Sep 6 (KNN) India’s micro, small, and medium enterprises (MSME) loan portfolio saw robust growth in the financial year ending March 2024, reaching Rs 64.1 trillion—a 17.8 per cent rise year-on-year (Y-o-Y), according to CRIF High Mark's latest How India Lends report.

The report, accessed by The Financial Express, highlights the expanding role of MSMEs and self-employed individuals in the country’s economy, with loans extended to these segments seeing significant increases.

The report defines MSME loans as credit extended to entities with a total credit exposure of up to Rs 50 crore, including self-employed individuals.

Loans to self-employed individuals grew at a strong pace, surging by 28.9 per cent to Rs 35.7 trillion. Meanwhile, loans to MSME entities recorded a more measured growth of 6.6 per cent, reaching Rs 28.4 trillion.

A total of 27.4 million MSME loans were sanctioned in FY24, amounting to Rs 54.2 trillion—a 19.3 per cent rise in volume and a 5.4 per cent increase in value over the previous year.

The report also noted a 3.1 per cent Y-o-Y rise in the value of originations for MSME entities, with volume growth much higher at 18.9 per cent.

Individual MSMEs experienced particularly strong growth, recording a 12.6 per cent Y-o-Y increase in the value of originations and a 19.4 per cent rise in loan volume during the same period.

The report highlighted mixed trends in portfolio quality. For individual MSMEs, the Portfolio at Risk (PAR) for loans overdue by 31-90 days improved to 2.7 per cent by March 2024, down from 3 per cent a year earlier. Similarly, delinquency rates for longer overdue periods showed improvement.

However, the MSME entity segment saw some deterioration, with the PAR 31-90 increasing to 2.5 per cent, up from 2.1 per cent in March 2023.

In addition to MSME growth, the microfinance sector also flourished, registering a 26.8 per cent growth in its loan portfolio, totalling Rs 4.4 trillion by March 2024.

(KNN Bureau)