Money & Banking

Commercial credit growth rebounds to pre-Covid level: Report

Our Bureau Mumbai | Updated on February 18, 2021

The total on-balance-sheet commercial lending exposure in India stood at ₹71.25 lakh crore in September 2020, registering a growth of 2.1 per cent year on year, said the latest TransUnion CIBIL-SIDBI MSME Pulse Report

The growth in commercial credit enquiries were at nearly pre - Covid levels by December last year, aided by the government’s Emergency Credit Line Guarantee Scheme.

“Commercial credit enquiries surged 58 per cent year-on-year in June 2020 and stabilised toward the end of the year, up around 13 per cent year on year as of December 2020, which is similar to pre-Covid-19 growth levels,” said the latest TransUnion CIBIL-SIDBI MSME Pulse Report.

The total on-balance-sheet commercial lending exposure in India stood at ₹71.25 lakh crore in September 2020, registering a growth of 2.1 per cent year on year, it further said.

Significantly, for the micro, small and medium enterprises (MSMEs), credit exposure grew 5.7 per cent on an annual basis in September last year, amounting to ₹19.09 lakh.

“This credit growth is observed across all the sub-segments of MSME lending,” it said adding that MSME loan originations show a v-shaped recovery with the existing to bank segment being the primary beneficiary.

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Rajesh Kumar, Managing Director and CEO, TransUnion CIBIL said the resurgence in MSME credit growth, which is back at pre-pandemic levels, is a very promising indicator of economic recovery in our markets.

“Public sector banks are the leading drivers of this resurgence as they have astutely wielded data analytics and credit information solutions to swiftly comply with the ECLGS guidelines and dexterously implement lending to MSMEs,” he further said.

PSBs registered a 30 per cent year growth in loan originations in September 2020, which was nearly double their pre-Covid level of 16 per cent in February 2020.

For private banks, the YoY originations growth stood at 16 per cent in September last year.

The report however, said that recent enquiry trends for December 2020 and January 2021 show a reversal of this trend. Private banks have resumed MSME lending and are closing the gap rapidly, it said.

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Published on February 18, 2021
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