Bhoomika Singh
According to a weekly report by SBI Research, the credit growth to the Ministry of Micro, Small & Medium Enterprises (MSME) sector has grown by Rs 52,800 crore in the current fiscal year (FY) 2022-23 against a decline of Rs 61,000 crore during a similar period of the previous year.
The report titled ‘Ecowrap’ has noted that the overall credit growth has gained further traction over the previous fiscal and has recorded a three-year high growth of 14 per cent as of mid-July. Retail loans during the period expanded by Rs 1.34 lakh crore against a degrowth of Rs 26,500 crore last year.
The sector-wise credit data for June 2022 indicates that there is a substantial improvement in incremental credit to every sector. Further, the aggregate deposits grew by 8.4 per cent for the fortnight ended July 16, 2022, compared to last year’s growth of 10.7 per cent.
During the fortnight, there was a decline in deposits by Rs 1.51 lakh crore and Rs 1.0 lakh crore in credit. “The decline in deposits is due to the trend in every alternative fortnight, which may be due to salary withdrawals in the first fortnight of every month for recurring consumption purposes,” it said.
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Going forward, the banking sector outlook depends upon the evolving geopolitical situation and its impact on global commodity prices and logistics. “In FY23, we expect both deposits and credit will continue to grow in double digits, despite the interest rate reversal,” the SBI Research added.
Earlier too, RBI reported that bank credit to micro and small enterprises (MSEs) in February 2022 jumped 8.4 per cent to Rs 13.12 lakh crores. However, a research report by NeoGrowth shows some positive signs, stating that the credit demand among MSMEs has reached or is about to reach the pre-covid levels.
