(MENAFN- KNN India)
Mumbai, Dec 2 (KNN) bank credit to Micro, Small, and Medium Enterprises (MSMEs) under the priority sector lending scheme surged by 13.9 per cent in October 2024, totalling Rs 26.34 lakh crore, up from Rs 23.11 lakh crore in the same month last year, according to the latest data from the Reserve Bank of India (RBI).
This boost in credit deployment reflects the sector's growing importance in India's economy. MSME credit now accounts for 15.7 per cent of the nation's total non-food credit, which stands at Rs 167 lakh crore, a slight increase from 15.5 per cent in October 2023.
The growth in MSME lending was driven primarily by micro and small enterprises (MSEs), which saw an increase of 12.3 per cent, reaching Rs 20.76 lakh crore, up from Rs 18.49 lakh crore last year.
Credit to medium enterprises also rose significantly, by 20.8 per cent, reaching Rs 5.57 lakh crore, compared to Rs 4.61 lakh crore in October 2023.
The government's focus on supporting MSMEs is expected to continue, with the introduction of a new credit assessment model based on MSMEs' digital footprints.
This move, aimed at reducing dependency on traditional loan underwriting methods based on asset or turnover, is expected to further boost credit access for small businesses.
Finance Minister Nirmala Sitharaman recently highlighted a Rs 100 crore credit guarantee scheme for MSMEs, which is set to be presented for Union Cabinet approval soon.
The scheme will offer guarantees through the MSME Ministry and participating banks, strengthening financial support for the sector.
The Ministry has also set ambitious targets for MSME lending, with plans to push credit to Rs 6.12 lakh crore in FY 2025-26 and Rs 7 lakh crore by FY 2027.
RBI Deputy Governor T. Rabi Sankar recently urged MSMEs to formalize their operations and focus on improving financial discipline to enhance their access to credit and strengthen their financial health.
This call comes as MSMEs continue to play a pivotal role in India's economic growth, employment, and innovation.
(KNN Bureau)
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