The Emergency Credit Line Guarantee Scheme (ECGLS) has helped increase credit growth for small businesses, with the index of credit growth for key sectors supporting the index a notch higher at the end of the September quarter.
However, due to the recognition of the quality of the particular asset, postponement, reorganization and then the Supreme Court decided the standstill, the ‘power index’ for MSMEs (micro, small and medium enterprises) will become clearer in the next few months, the Transunion Cibil Index prepared. Said SIDBI.
The latest MSME Credit Health Index states that credit growth has accelerated, as the overall growth index has increased by 114 points, a three-point increase from 111 in June. The overall strength index improved from 83 to 89 over the same period, according to the index prepared by the credit information company and state-run Financials.
“The right direction of the power index will become clear over the next few months as regulatory and legal guidelines regarding NPA (non-performing assets) restructuring emerge,” it said.
The index has been prepared since November 2020 in collaboration with the Ministry of Statistics and Program Implementation (MoSPI) and is created using credit data submitted by lending institutions to Transunion Cibil.
CIBIL Managing Director and Chief Executive Rajesh Kumar said that ECLGS Infusion is a time-bound policy intervention proving it to be beneficial in both the short and long term.
“As MSMEs now have much-needed financial support, they are able to scale up their businesses, which had experienced epidemics and the resulting lockdowns following the catastrophic ascent,” he said.
The report noted that private banks and public sector banks (PSBs) have seen growth in the quarters of June and September, while non-bank financial companies (NBFCs) have seen growth.
Data on absolute loan disbursement showed that PSB emerged as the leading MSME lender group in the period from June 2020 to September 2020, while disbursements by private banks, which were also affected during the lockdown, were pre-COVID- Are back at 19 levels.
Tamil Nadu, Maharashtra and Gujarat have shown high growth rates during this quarter, while Uttar Pradesh has also maintained its growth in the last two quarters.
Among the top 10 states regarding exposure, southern states showed higher growth than northern states, cumulatively with respect to microorganisms.
West Bengal and Telangana, which are also in the top 10, have a stable strength index as well as a rapidly growing growth index, the pair added.