Private sector banks report significant increase in MSME lending market share: CRIF High Mark

Private sector banks (PvSB) reported a significant increase in micro, small and medium enterprise (MSME) lending market share in value and volume over the past two fiscal years, with public sector banks (PSB ) and non-banking financial corporations (NBFCs) losing market share.

There was a significant increase in market share (in original value) for PvSBs from 33.6% in FY19-20 to 69.8% in FY21 -22, CRIF High Mark said in its “MSME Insights” report.

In terms of issue volume, PvSB’s share increased from 26.9% in FY19-20 to 33.5% in FY21-22.

“This is attributable to the increase in the average note size of private banks from ₹47.1 lakh in FY19-20 to ₹150.5 lakh in FY21-22,” according to The report.

The market share of PSOs (in issue value), which had increased from 47.9% in FY19-20 to 72.9% in FY20-21, fell to 19, 1% in fiscal year 21-22, according to data from the Credit Bureau. report.

By original volume, which increased from 51% in FY19-20 to 71.6% in FY20-21, decreasing to 48.2% in FY21- 22.

NBFC’s market share (at original value), which fell from 12.1% in FY19-20 to 5.9% in FY20-21, fell further to 5.7% in fiscal year 21-22.

By original volume, which had grown from 14.9% in FY19-20 to 6.4% in FY20-21, increased to 12.9% in exercise 21-22.

Average ticket size

In FY21-22, the average ticket amount is ₹28.6 lakh for public sector banks, ₹32.1 lakh for NBFCs, ₹502.6 lakh for foreign banks and from ₹26.1 lakh for other types of lenders, according to CRIF data.

Portfolio outstanding for MSME industry at ₹22.7 Lakh crore at end-March 2022 was up 18% from end-March 2021 level (of Rs 19.3 lakh crore) and up 36% compared to the level at the end of March 2020 (Rs 16.7 lakh crore).

Total active loans for the MSME industry at 137.4 lakh accounts at the end of March 2022 were up 7% from the level at the end of March 2021 (128.8 lakh) and up 43% from the level from the end of March 2020 (95.8 lakh).

Portfolio at risk

The portfolio at risk (PAR) based on 91 to 180 days past due (DPD) was 1.3% at the end of March 2022, compared to 1.6% at the end of March 2021.

The PAR on 181-360 DPD remained stable at 0.3%. PAR out of 360+ DPD at 2.2% in March 2022, improving from 2.5% in March 2021.

In FY21-22, the market share (in original value) of the small borrowers segment (₹1 crore – ₹10 crore) is the largest at 28.5%, followed by the Mudra segment ( up to ₹10 lakh) at 26.2%; Medium segment (₹10 crore – ₹50 crore) at 22.8% and micro segment (₹10 lakh – ₹1 crore) at 22.5%.

Maharashtra, Tamil Nadu and Delhi are the top 3 states by origin value in FY21-22, constituting 64% of the overall origin value in FY21-22.

Maharashtra, Tamil Nadu and Uttar Pradesh are the top 3 states by volume of origins in FY21-22.

Maharashtra has the highest average loan size to MSMEs at ₹256.5 lakh in FY21-22, followed by Delhi (₹113.2 lakh) and West Bengal (₹81.1 lakh) .

Published on

June 25, 2022

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