MSME credit to cross Rs 25,000 cr this year in UP

The total credit to the Micro, Small and Medium Enterprises (MSME) by commercial banks in Uttar Pradesh is likely to breach the figure of Rs 25,000 crore this financial year.The figure has already crossed Rs 23,000 crore so far, and as the current financial year still has two months to go, the mark of Rs 25,000 crore is quite achievable. UP has a large MSME base estimated at about 1.2 million, including 500,000 registered units. There are several industrial pockets in Varanasi, Allahabad, Moradabad, Saharanpur, Lucknow, Kanpur, Agra, Ferozabad, Meerut, Bhadohi, Ghaziabad, Noida, Bareilly, Gorakhpur, Khurja, Aligarh and Mathura.

MSME accounts for about 8 per cent of the State Gross Domestic Product (SGDP) of around Rs 315,000 crore and almost 50 per cent of the industrial output.As per the Reserve Bank of India (RBI) guideline, loans up to Rs one crore to MSMEs can be given without collateral so as to provide easy finance to them.The percentage of credit to MSME sector Net Bank Credit (NBC) stands at 17 per cent, which is not too encouraging though. At present, UP has a network of over 11,500 branches of the various commercial, RRBs and cooperative banks. There are around 3,000 RRBs. So far, 34 of the total 71 districts in the state has been declared 100 per cent financially included. The banks have deposits and advances base of Rs 270,000 crore and Rs 126,000 crore respectively. The credit deposit ratio stands at 47 per cent, which shows a high growth potential for expansion of the banking sector in the state.