Credit and Finance for MSMEs: The deployment of gross bank credit to micro and smaller enterprises (MSEs) remained steady in October as nicely. From Rs 10.53 lakh crore as on October 25, 2019, the deployment was up 6.8 per cent to Rs 11.25 lakh crore as on October 23, 2020, according to the Reserve Bank of India (RBI) information. The credit development in September was 6.7 per cent to Rs 11.27 lakh crore when August deployment improved 5.4 per cent to Rs 11.04 lakh crore from the year-ago period. However, the October 2020 credit development continued to contract by minus 2.1 per cent in the economic year 2020-21 so far, up from minus 1.9 per cent in September. As of March 27, 2020, bank credit to MSEs stood at Rs 11.49 lakh crore.
Importantly, when the general year-on-year credit development to MSEs showed continued development, credit deployment to manufacturing MSEs was ultimately out of red in the existing FY with a development of .7 per cent in October to Rs 3.61 lakh crore from Rs 3.59 lakh crore in October FY20. The segment had remained contracted considering the fact that March when credit development was 1.7 per cent. The highest contraction of minus 3.7 per cent was recorded in June when for April, May, July, August, and September, the development shrunk by minus 2.2 per cent, minus 3.4 per cent, minus 1.9 per cent, minus 1.2 per cent, and minus .1 per cent respectively. However, credit development remained contracted in the economic year so far. The decline in FY21 so far was minus 5.3 per cent from Rs 3.81 lakh crore deployed in March.
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Deployment to services MSE continued to be in green in October FY21. The gross bank credit development was up 10 per cent from Rs 6.94 lakh crore in October final FY to Rs 7.63 lakh crore. Similarly, for September, the deployment grew 10.2 per cent to Rs 7.66 lakh crore and for August, it was up 8.8 per cent to Rs 7.49 lakh crore. Nonetheless, the development in FY21 so far till October remained damaging to .5 per cent from Rs 7.67 lakh crore in March 2020. The contraction in the FY till September stood at minus .2 per cent to Rs 7.66 lakh crore.
Meanwhile, the government had enabled sanctioning of more than 80 lakh loans involving Rs 2.05 lakh crore out of which loans involving more than Rs 1.58 lakh crore has been disbursed as of December 4, 2020, below the Emergency Credit Line Guarantee Scheme. The scheme was extended from October 31, 2020, to November and additional till March 2021 as it targeted to allow disbursement of Rs 3 lakh crore scheme corpus announced in May as component of the Atmanirbhar package to MSMEs, people, Mudra enterprises, and other enterprises.