One of India’s leading credit bureau, CRIF High Mark in a recent report titled ‘How India Lends 2021’ stated that an overall upsurge was witnessed in commercial loans between FY17 to FY21. A 17.6 percent growth was seen on annual basis.
In terms of market share, PSU Banks and Private Banks dominated the overall commercial loan and MSME loan business. The report said, “private banks dominate the portfolio outstanding for MSME loans with a share of 41.7 percent, while public sector banks dominate active loans with a share of 39.7 percent as of March 2021.”
The report stated that a 15 percent drop was witnessed in the ticket size of commercial loans from Rs 72.5 lakhs in FY2017 to Rs 61.5 lakhs in FY2020. Further, a 30 percent quarterly drop was witnessed in origination by value in Q1 of FY21 due to national lockdown. Public sector bank had reduced the average ticket size by 65 percent from Rs 78.5 lakhs in FY17 to Rs 27.6 lakhs in FY2021.
The report said, “A 15 percent growth in share (by value) of MSMEs in overall commercial loans has been noticed from 16.2 percent in FY17 to 24.6 percent in FY21.”
It adds, “The report records almost 2X growth in share (by volume) of micro enterprises from FY17 to FY22.”
Further a growth of 33 percent was seen in share by value and 47 percent growth in share by volume of Micro Enterprises among MSMEs from FY17 to FY21.
The report indicates that there is a 3 percent increase in share of Working Capital loans (by value) from 62.6 percent in FY17 to 66 percent in FY21.