MSME Credit Growth Jumps 18% in April 2024: RBI

Mumbai, Jun 7 (KNN) In a positive development for the Micro, Small and Medium Enterprises (MSME) sector, the gross bank credit deployed by scheduled commercial banks under priority sector lending norms grew by a robust 18.1 per cent in April 2024 compared to the same month last year, according to the latest data from the Reserve Bank of India (RBI).

As of April 2024, Rs 24.6 lakh crore was deployed to the MSME sector, a significant increase from Rs 20.84 lakh crore in April 2023.

Priority credit to MSMEs accounted for 14.9 per cent of India's non-food credit, which stood at Rs 164.76 lakh crore during the month.

Within the MSME sector, credit to micro and small enterprises (MSEs) witnessed an 18.6 per cent growth, reaching Rs 19.64 lakh crore in April 2024, up from Rs 16.56 lakh crore in the same month last year.

Similarly, credit to medium-sized organisations increased by 16.5 per cent to Rs 4.98 lakh crore from Rs 4.28 lakh crore during the period.

However, the ratings agency Crisil has cautioned that growth in bank credit to MSMEs in the current fiscal year (FY25) is likely to slow down from the previous fiscal.

This slowdown is expected amid an anticipated moderation in overall growth in bank credit by around 200 basis points (bps) to approximately 14 per cent in FY25, following an estimated robust growth of around 16 per cent in the previous fiscal.

Crisil estimates that bank credit growth in the MSME segment will be around 15 per cent in the current fiscal, down from a robust around 19 per cent in fiscal 2024.

Meanwhile, other sectors eligible for priority lending from banks, such as agriculture, received Rs 20.60 lakh crore in April, while housing secured Rs 7.53 lakh crore.

Additionally, education loans, renewable energy, social infrastructure, and export credit saw credit deployments of Rs 61,027 crore, Rs 5,712 crore, Rs 2,619 crore, and Rs 13,433 crore, respectively.

(KNN Bureau)