MSME Credit Growth Slows Down, Asset Quality Deteriorates: Kotak

The Hindu Business Line|January 14, 2020

MSME Credit Growth Slows Down, Asset Quality Deteriorates: Kotak
The overall credit growth to the micro, small and medium enterprise (MSME) segment slowed further in the second quarter (Q2 FY20) to 5 percent year-on-year (y-o-y), according to a report by Kotak Securities.

Simultaneously, the asset quality in these loans continued to deteriorate for a second consecutive quarter.

The decline in credit growth to MSMEs, from 20 percent to 25 percent a year ago, was led by a slowdown across all ticket sizes, although the larger ticket-size segments (₹1 crore to ₹50 crore) saw steeper deceleration. The loan book has declined sequentially for two consecutive quarters (down 3 percent in the first half of FY20), the report said.

MSMEs accounted for about 28 percent of the overall commercial lending in India as of Q2, with an on-balance sheet loan outstanding of ₹18.3-lakh crore.

PSB market share

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January 14, 2020