MSME Loan Portfolio Reaches Rs 64.1 Tn In FY24: Report

Driven by the rise in loans to self-employed individuals, the loan portfolio of the country’s micro, small and medium enterprises (MSMEs) reported a growth of 17.8 per cent on a year-on-year basis (YoY). As per the fourth edition of CRIF High Mark’s How India Lends report, the loan portfolio has reached Rs 64.1 trillion by March 2024.

As per media reports, the loans encompass the credit that is given to entities who have an overall credit exposure of up to Rs 50 crore as well as the self-employed individuals.

There has been an uptick in the loans provided to self-employed individuals as they have surged by 28.9 per cent to Rs 35.7 trillion. On the other hand, the MSME entities have reported modest growth of 6.6 per cent to Rs 28.4 trillion of loans.

In the Financial Year 2024, around 27.4 million MSME loans were sanctioned which amounted to Rs 54.2 trillion, marking a 19.3 per cent growth in volume. The value growth stood at 5.4 per cent. On the other hand, individual MSMEs witnessed 12.6 per cent YoY growth in value of originations.

The portfolio quality of individual MSMEs also witnessed an improvement as the portfolio at risk (Par) for 31 to 90 days dipped to 2.7 per cent by March 2024. The same was at 3 per cent during the same month last year. The portfolio quality of the MSME entity segment reported a decline as the Par increased to 2.5 per cent in March 2024 compared to 2.1 per cent a year ago.

The loan portfolio of microfinance expanded during the previous financial year as it grew to Rs 4.4 trillion, registering a growth of 26.8 per cent. As far as origination volume is concerned, it increased by 6 per cent as the total number of loans sanctioned stood at 83.5 million.