Credit demand of non-metro MSMEs reach pre-Covid levels: Report

New Delhi, June 15 (KNN) Owing to the marginal lag recorded in metro cities, the credit demand from MSMEs in non-metro cities in March 2022 was back to the pre-Covid levels, said a report. 

As per a recent study by digital MSME lender NeoGrowth, petrol pumps, infrastructure, and auto which are non-discretionary demand-oriented businesses had ecovered faster than consumer-facing and discretionary demand-oriented businesses.

From the period of March 2020 to March 2022, about 40,000 MSMEs from 25 cities were assessed for the study, tilted as ‘Rising In The Face Of Adversity’.

Highlighting the revival of MSMEs during the post-Covid period, the report said that during the second wave, MSMEs were well prepared and could adjust to the new business environment as only 30 per cent MSMEs had required support last year in comparison to the first wave in 2020.

Stressing on the findings of the report, Arun Nayyar, Whole Time Director & CEO, NeoGrowth said, “Many MSMEs were struggling in 2020-21 due to the burden of loan repayments because of the cessation of demand from consumers…The MSME ecosystem in India is a ‘Survival to Revival’ saga.”

The vital lessons learned from the pandemic have transformed the way businesses operated and fast-tracked their move to digital. The credit demand from MSMEs is back to a healthy level, he added.

Although MSMEs across segments were impacted due to the pandemic, but financial support was required by only 46 per cent MSMEs with higher demand from non-metros than metros, said the report.

Moreover, financial support availed by non-discretionary MSMEs was lesser compared to other businesses.  (KNN Bureau)