(MENAFN- KNN India)
New Delhi, Jan 31 (KNN) In a notable development, credit growth to micro, small, and medium enterprises (MSMEs) has outpaced that of large enterprises, according to the latest Economic Survey for 2024-25, presented by Union Finance Minister Nirmala Sitharaman in the Lok Sabha on Friday.
The report highlights that as of November 2024, bank credit to MSMEs grew by 13 per cent year-on-year (YoY), significantly outstripping the 6.1 per cent YoY growth seen by large enterprises.
This sharp uptick in credit to MSMEs signals a positive shift in the financial ecosystem, as the government continues to prioritise this crucial sector, which drives a significant portion of India's economic activity.
The increased credit flow is vital for MSMEs, enabling them to fuel growth, innovation, and job creation.
The Survey also highlighted a slowdown in credit growth to certain sectors. For instance, credit growth to services and personal loan segments moderated to 5.9 per cent and 8.8 per cent, respectively, at the end of November 2024.
This deceleration was attributed to a reduction in credit disbursed to Non-Banking Financial Companies (NBFCs), with vehicle and housing loans contributing to the moderation in personal loans.
Further, policy interventions by the Reserve Bank of India (RBI), including raising risk weights on NBFCs and credit cards, have also played a role in curbing credit growth in these areas.
In a forward-looking initiative, the Survey discussed the potential of the Unified Lending Interface (ULI), launched by the RBI in August 2023, to revolutionize MSME financing.
The ULI aims to streamline the lending process and has already facilitated the disbursement of Rs 38,000 crore, setting the stage for more accessible and efficient financing solutions for small businesses.
The Economic Survey, drafted by Chief Economic Advisor V. Anantha Nageswaran and his team, provides a detailed analysis of India's economic landscape, marking an important step as the country looks to strengthen its economic foundation for the coming year.
(KNN Bureau)
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