New Delhi, Mar 2 (KNN) The target set by Prime Minister’s Task Force on MSMEs for lending to micro and small enterprises (MSE) sector was 20% year-on-year growth in credit. However, the target was achieved only by the Private Sector Banks while the Public Sector Banks and Scheduled Commercial Banks were far from achieving it.

According to the Prime Minister’s Task Force the allocation of 60% of the MSE advances to the micro enterprises was to be achieved in stages viz. 50% in the year 2010-11, 55% in the year 2011-12 and 60% in the year 2012-13 and  it also asked the banks to achieve a 10% annual growth in number of micro enterprise accounts.

Surprisingly, the performance of private banks was much better than that of SCBs and PSBs.

SCBs could register y-o-y growth of 7.13% as on September 30, 2016 over September 30, 2015, while Private Sector Banks and Foreign Banks surpassed the target of 20% by registering a growth of 23.45% and 30.19% respectively, according to an official data.

Amongst all, Public Sector Banks performed the worst in terms of lending to MSEs as they could register y-o-y growth of 0.15% only during the same period.

Against the annual target of 10% growth in number of accounts of Micro Enterprises, SCBs surpassed the said target by registering a growth of 30.36% as on September 30, 2016 over September 30, 2015. While Private Sector Banks surpassed the same by registering a growth of 50.83%, Public Sector Banks and Foreign Banks could register a growth of 13.53% and (-6.82)% respectively during the same period.

The share of outstanding credit to Micro Enterprises vis-à-vis total outstanding credit to MSE sector by SCBs which stood at 51% as on September 30, 2015, increased to 53% as on September 30, 2016 against the target of 60%. This share in respect of Public Sector Banks, Private Sector Banks and Foreign Banks stood at 51%, 58% and 56% respectively as on September 30, 2016.

As on March 31, 2016, SCBs had shown an increase of 3.67% over March 2015 in the amount of outstanding credit to the MSE sector. However, during the period from March 31, 2016 to September 30, 2016, the SCBs could register a growth of 1.25% in the amount outstanding credit.

The SCBs recorded a growth of 7.13% in outstanding credit to MSE sector as on September 30, 2016 vis-à-vis September 30, 2015 as against growth of 3.67% as on March 31, 2016 visa-vis March 31, 2015.

The share of Public Sector Banks in the total outstanding credit to MSEs by Scheduled Commercial Banks stood at 68.47% as on March 31, 2016 which marginally declined to 66.21% as on September 30, 2016.

According to the data, of the total MSEs’ outstanding credit, SCBs contributed 37.50% to Manufacturing Sector and 62.52% to Service sector as on September 30, 2016.

In March 2016, the share of manufacturing and services was 36.22% and 63.78% respectively. While the gap in percentage share of lending to Manufacturing sector vis-à-vis Service sector was high in case of Private and Foreign Banks, the same was observed to be less in case of PSBs.

Meanwhile, the outstanding credit to MSME sector as a percentage of ANBC (Adjusted Net Bank Credit), has shown an increasing trend in September 2016 across the bank group in comparison to March 2016.

According to RBI Standing Advisory Committee  Agenda, RBI has taken up the matter by writing to the banks as well as holding one to one meetings with senior level officials looking after credit to the Sector of such banks that have failed to achieve the targets prescribed by the PM’s Task Force for the MSE sector and have impressed upon them the need to achieve the targets. (KNN Bureau)