MSMEs Credit Growth: Credit growth of MSMEs decelerated in June quarter - RBI data

The growth of loans given to Micro, Small, and Medium Enterprises (MSMEs) has seen a decline in the June quarter on an annual basis. The information was obtained from the data released by the Reserve Bank of India.

MSMEs are considered to be the backbone of the country's economy and it is also the largest employment-generating sector in the country. According to the Reserve Bank's data, the growth rate of loans given to medium industries has been 13.2 percent in June, which was 47.8 percent last year. Credit to micro and small industries grew by 13 percent in June, as against a growth of 29.2 percent a year ago.

At the same time, at the end of June, the gross credit outgoing of the bank to medium industries was Rs 2,63,440 crore, which was Rs 2,32,776 crore till the end of last year. The bank's gross credit outgoings to micro and small industries stood at Rs 6,25,625 crore at the end of June, as against Rs 5,53,675 crore in the same period last year.

FISME Secretary General Anil Bhardwaj said RBI data showed double-digit growth in bank credit to MSMEs, which may indicate a free flow of institutional finance to MSMEs. But, getting bank credit is still a herculean task for MSMEs. According to a committee formed by the Reserve Bank of India in December 2018, the MSME sector needs a credit of Rs 20 to 25 lakh crore.

Also Read: Foreign exchange reserve decreased for the sixth consecutive week