Priority Sector Lending To MSMEs Grows To Rs. 26 Lakh Crore On NBFC’s Push

New Delhi, May 3 (KNN) Deployment of gross bank credit to micro, small and medium enterprises (MSMEs) under priority sector lending reached Rs 24.67 lakh crore in March 2024, according to the latest data from the Reserve Bank of India (RBI). This figure represents a substantial 19.2 per cent growth from the Rs 20.69 lakh crore deployed in March 2023.

The total bank credit to MSMEs under priority sector lending in March accounted for 15 per cent of India's non-food credit, which stood at Rs 164.11 lakh crore during the month.

Breaking down the figures, credit deployment to micro and small enterprises (MSEs) witnessed a 20.1 per cent increase, reaching Rs 19.76 lakh crore in March 2024, up from Rs 16.45 lakh crore in the year-ago period.

Similarly, credit to medium-sized businesses saw a 15.8 per cent jump, rising to Rs 4.90 lakh crore from Rs 4.23 lakh crore during the same period.

While bank credit to MSMEs continues to grow, non-banking financial companies (NBFCs) have taken the lead in providing credit support to this sector.

According to a performance report on the banking sector released in December last year, NBFC loans to MSMEs were more than three times the loans extended by banks.

Compared to the 12.7 per cent and 12.4 per cent year-on-year (YoY) growth in MSME credit by banks as of March 2022 and March 2023, respectively, the credit growth by NBFCs to MSMEs stood at 21.2 per cent and 42.4 per cent for the same periods.

As of March 2023, service MSMEs held a 66.6 per cent share in NBFC credit to MSMEs, while MSMEs in industries accounted for the remaining 33.4 per cent.

(KNN Bureau)