Gandhinagar, July 19 (KNN) A study by TransUnion CIBIL- SIDBI MSME Pulse Report has shown that Gujarat stands at the first position in a row for performance and growth potential for MSME lending in India. Gujarat is followed by Andhra Pradesh, Haryana, Karnataka, and Delhi.

The sixth edition of TransUnion CIBIL- SIDBI MSME Pulse Report declares a continued growth of 12.4 percent year-on-year (YOY) in the quarter ending March 2019. In the tenure of five years from March 2015 to March 2019, total debt has reached to 253 trillion Indian rupees with the growth of CAGR of 13.3 percent. It comprises corporate entities, individual borrowers and government debt.

Individual lending for businesses proves a good shift in the composition of the lending industry favoring the individuals and an increase in it is a positive sign. These findings declare ease of doing business in India and MSMEs being able to get faster and easier access to credit for growth in business.

It is based on the capability of different States for extending the credit to MSMEs corporate entities defined basis the gross credit exposure up to Rs 50 crores. For identifying the growth of the market of FY 15 to FY 19, gradual changes over YOY are also included in the consideration.

Gujarat has stood at the top in ranking state in terms of performance and growth potential for MSME lending in India followed by Andhra Pradesh, Haryana, Karnataka and Delhi, the study concludes.

Maharashtra, Tamil Nadu, Rajasthan, Uttar Pradesh and Jammu & Kashmir are amongst other states amongst high potential in MSME corporate lending.

Based on state-wise performance, the Managing Director and CEO of TransUnion CIBIL, Satish Pillai, said, “The state-wise performance declares significant light on the credit opportunity, the capability of MSME growth and also at risk proclaim across India. From the last four years, FY16 to FY19, Gujarat has been continuously in rank one. Also, in terms of market size, Maharashtra ranks the highest and its NPAs are a high indicator increase in credit risk”.

Growth in gross debt last four years is powered by a 22 percent CAGR growth on lending to individuals which includes (business loan to individuals and other loans and consumer loan). Lending of 13.4 percent CAGR to the commercial entities which includes, MSME and corporate entities and 10.6 percent of government debt.

A dip of NPAs (non-performing asset) adds up in these growths. In commercial lending, the gross NPA rate is marked at 16.0 percent in March 2019. This is a significant decrease from 17.2 percent last year in the same period of time.

Stretching on the markings from the findings of this edition of MSME Pulse, Chairman, and Managing Director, SIDBI, Mohammad Mustafa said, “MSME sector plays a key role to strengthen the economic development of the county. It is a good indicator from the sustained growth in commercial lending along with a marked lowering of NPAs”.