Credit and Finance for MSMEs: The year-on-year development in gross bank credit deployment to micro and little enterprises (MSEs) continued to be above the 6-per cent mark in January 2021. The credit deployed by banks in January stood at Rs 11.48 lakh crore, up 6.4 per cent from Rs 10.79 lakh crore in January 2020, according to the March 2021 bulletin of the Reserve Bank of India. However, the January YoY development contracted marginally by .2 per cent from 6.6 per cent December YoY development. The deployment in December 2020 was at Rs 11.31 lakh crore vis-à-vis Rs 10.61 lakh crore throughout the year-ago period. Importantly, the January credit development in the economic year 2020-21 was ultimately out of the red. The development had remained contracted till December 2020 in the economic year even as it enhanced from November’s minus 2.4 per cent development and minus 2.1 per cent development in October. As of March 27, 2020, bank credit to MSEs stood at Rs 11.49 lakh crore.
MSEs had a 12.09 per cent share in the general Rs 94.97 lakh crore gross bank credit deployed in January 2021, down from 12.11 per cent in December 2020. The Emergency Credit Line Guarantee Scheme (ECLGS) and the Credit Guarantee Scheme for Subordinate Debt (CGSSD) launched by the government final year “have been duly supported by various monetary and regulatory measures by the Reserve Bank in the form of interest rate cuts, higher structural and durable liquidity, moratorium on debt servicing, asset classification standstill, loan restructuring package and cash reserve ratio (CRR) exemptions on credit disbursed to new MSME borrowers. These measures will not only help in ameliorating stress in the sector but also open new opportunities,” mentioned ShaktiKanta Das, Governor, RBI in his speech at an occasion by Bombay Chamber of Commerce and Industry. The January bulletin didn’t disclose deployment towards MSEs in the manufacturing and services sectors.
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According to the MSME Ministry’s FY21 annual report, as per the National Sample Survey (NSS) 73rd round, performed by National Sample Survey Office, throughout 2015-16, there had been 6.33 crore unincorporated nonagriculture MSMEs in India which includes 1.96 crore in manufacturing, .03 lakh in non-captive electrical energy generation and transmission, 2.30 crore in trade and 2.06 crore in other services. This excluded these MSMEs registered below (a)Sections 2m(i) and 2m(ii) of the Factories Act, 1948, (b)Companies Act, 1956 and (c) building activities falling below Section F of National Industrial Classification (NIC) 2008, the annual report noted.