MSME lending: Gujarat retains top position in FY 19, Maharashtra plunges to rank 9

Maharashtra, among the most industrialised states, was ranked number one in FY16, but slipped to the second position the next fiscal to Gujarat, and continued on the trajectory, coming in at number four in FY18 and number nine in FY19.

19th Jul 2019
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Gujarat continues to top the list of states on the ranking on overall credit lending opportunity for MSMEs, according to data from state-run financier SIDBI and credit information company TransUnion CIBIL.


However, worries over the asset quality have led to Maharashtra slipping to the ninth rank for small businesses lending in FY19, from number four slot in the previous year,


Maharashtra, among the most industrialised states, was ranked number one in FY16, but slipped to the second position the next fiscal to Gujarat, and continued on the trajectory, coming in at number four in FY18 and number nine in FY19.


"For Maharashtra, the deterioration during the period from FY16 to FY19 was primarily due to a reduction in market growth. Bad loans have also increased over the years," the study said.


The state, which is headed for elections soon, is ranked top on market size, credit outstanding, total accounts and the number of borrowers, when it comes to serving MSMEs having a credit exposure of less than Rs 50 crore.


The study pegs the overall credit exposure in the country at Rs 116.7 trillion as of March 2019, of which as much as 55 percent are with the corporates.


On system-wide NPAs, which have dominated the narrative for the past five years, the study said there has been a fall with gross bad loans in the commercial loan segment. It said it reached 16 percent in March 2019 from 17.2 percent in March 2018.


The study added that bad loans peaked in the period between March 2018 to June 2018 for the medium and large segment, and said that adding commercial credit is on a recovery mode with bad loans finally declining since them.


Earlier in June 2019, it was reported that the Maharashtra government would soon launch the Chief Minister's Employment Generation Programme for MSMEs, which would create 10 lakh jobs in the next five years. 



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