MSME Loan Portfolio Expands by 17.8% to ₹64.1 Trillion in FY24: Report

India’s Micro, Small, and Medium Enterprises (MSME) loan portfolio saw substantial growth, increasing by 17.8% to reach ₹64.1 trillion by March 2024, as per the CRIF High Mark’s How India Lends Report. The report highlighted that MSME loans cover credit provided to entities with an overall exposure of up to ₹50 crore, as well as loans for self-employed individuals.

A significant portion of this growth came from loans to self-employed individuals, which surged by 28.9%, reaching ₹35.7 trillion. In contrast, loans to MSME entities rose more modestly, growing by 6.6% to ₹28.4 trillion.

During the financial year 2024, a total of 27.4 million MSME loans were sanctioned, amounting to ₹54.2 trillion, reflecting a 19.3% increase in volume and a 5.4% rise in value. The report also showed a 3.1% year-on-year (YoY) increase in the value of loan originations for MSME entities, with an 18.9% growth in volume. Meanwhile, individual MSMEs posted a 12.6% YoY growth in loan value originations and a 19.4% increase in volume.

The report highlighted improvements in the portfolio quality of individual MSMEs. The Portfolio at Risk (PAR) for 31-90 days dropped to 2.7% by March 2024, compared to 3% in March 2023. Delinquency rates also improved across other categories, with PAR 91-180 falling to 1.1%, PAR 181-360 to 0.7%, and PAR 360+ reducing to 7.3% by the end of March 2024.

However, the MSME entity segment experienced a slight decline in portfolio quality, with PAR 31-90 rising to 2.5% and PAR 91-180 increasing to 1.1%, up from 2.1% and 1%, respectively, in March 2023.

In addition to MSME loans, the microfinance loan portfolio also expanded significantly during FY24, registering a 26.8% growth to reach ₹4.4 trillion. The origination volume of microfinance loans grew by 6%, with a total of 83.5 million loans sanctioned, amounting to ₹3.8 trillion, reflecting a 19% growth in loan value.

Disclaimer: The information provided in this article is based on news updates and reports gathered from various internet sources. While every effort has been made to ensure the accuracy and reliability of the information, we encourage readers to verify the details independently before making any decisions.