In the MSME loan landscape, lending to the micro-segment, where credit is less than Rs 1 crore, showed the highest growth in the March quarter, while loans to medium-sized businesses contracted. Public sector banks led in MSME loan originations in the micro segment in Q4 FY23, with a 23% YoY growth in origination value. In contrast, the 'small' segment (credit exposure between Rs 1 crore and Rs 10 crore) grew by just 1%, and the 'medium' segment (Rs 10-50 crore credit exposure) saw a 19% decline. The total commercial credit exposure was Rs 27.7 lakh crore, with new loans of Rs 2,41,000 crore, a slight decrease from Q1 FY22. With increasing demand, improved credit performance, and promising economic growth prospects, it's a reasonable time for lenders to expand their MSME credit portfolios in India, as the sector is expected to continue growing, reaching 750 lakh MSME corporate entities by FY23.
In the MSME loan landscape, lending to the micro-segment, where credit is less than Rs 1 crore, showed the highest growth in the March quarter, while loans to medium-sized businesses contracted. Public sector banks led in MSME loan originations in the micro segment in Q4 FY23, with a 23% YoY growth in origination value. In contrast, the 'small' segment (credit exposure between Rs 1 crore and Rs 10 crore) grew by just 1%, and the 'medium' segment (Rs 10-50 crore credit exposure) saw a 19% decline. The total commercial credit exposure was Rs 27.7 lakh crore, with new loans of Rs 2,41,000 crore, a slight decrease from Q1 FY22. With increasing demand, improved credit performance, and promising economic growth prospects, it's a reasonable time for lenders to expand their MSME credit portfolios in India, as the sector is expected to continue growing, reaching 750 lakh MSME corporate entities by FY23.