As per the latest MSME Pulse report by TransUnion CIBIL, total MSME credit grew 5.7% YoY (3.5% QoQ) to INR19.1t as of Sep'20, aided by ECLGS disbursements, with better trends witnessed in the Micro segment (8-9% YoY), Motilal Oswal Financial Services has stated in its report.
Inquiry trends in Commercial credit touched pre-COVID levels (13% YoY as of Dec'20) after witnessing a sharp drop in Apr'20. Public Sector Banks have taken a lead in MSME loan originations since Apr'20 and gained market share.
"However, recent inquiry trends suggest that Private Banks are inching back to pre-COVID levels, with 22% YoY growth in inquiries v/s 9% growth for PSBs in Dec'20. Approval rates have increased with the announcement of the ECLG scheme. The highest beneficiaries of the rise in approval rates are high risks MSME borrowers with a CIBIL rank of 7-10, signaling increasing risk in this segment. However, the NPA ratio declined to 12.1% as of Sep'20 (v/s 13% as of Jun'20) due to the Supreme Court order of not declaring NPAs till further notice.
As per the latest finance ministry release, total loans sanctioned under ECLGS stand INR2.1t, of which INR1.65t has already been disbursed. Among lenders, PSBs disbursed INR612b and Private Banks INR808b," the Motilal Oswal report states.