Credit and financing for MSMEs: Unsecured loans, which include loans to small and medium enterprises (SMEs) and consumer loans, will likely be the only segment of total assets under management (AUM) of non-bank financial companies (NBFCs) to see the pre-Covid era growth of 20 to 22% during this financial year, the analysis company Crisil announced on Monday. This would come on the back of double-digit AUM growth of 11-12% to around Rs 13 lakh crore for NBFCs in FY22, on macroeconomic tailwinds, after three years of growth at a figure.
“With NBFCs focusing on higher yielding segments, unsecured lending, which accounts for the second largest share (16-20%) of the NBFC AUM pie, may be the only segment to touch era growth. pre-Covid by 20-22 percent this exercise. The cautious approach of NBFCs led to a decline in assets under management for this segment in fiscal 2021, while fiscal 2022 saw a V-shaped recovery,” said Ajit Velonie, Director of CRISIL Ratings. .
While business lending will benefit from macroeconomic tailwinds given the projected 7.3% growth in gross domestic product (GDP) this fiscal year, consumer lending will benefit from increased retail spending in consumer durables, travel and other personal consumption activities, the credit rating agency noted.
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Additionally, home loans, another NBFC product line aimed at SMEs, are also expected to see 10-12% growth, although competition is keeping higher growth at bay in this space, Crisil said. In addition, gold loans are expected to register a steady growth rate of 10-12% driven by demand from micro-enterprises and individuals for their working capital and personal needs respectively.
Overall, credit to MSMEs in FY22 increased by 13.38% to Rs 20.22 lakh crore from Rs 17.83 lakh crore in FY21, even though the number MSME loan accounts increased from 420 in FY21 to 265 in FY22, according to the report’s provisional data. Reserve Bank of India FY22 Annual Report. In the current financial year, in July 2022, credit to the MSME sector was Rs 18.08 lakh crore, up 24% from Rs 14.56 lakh crore in July last year, according to the latest data from the RBI on the sectoral deployment of bank credit.
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