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04 December 2018
 |
MSME(The
Total Investment & Insurance Solutions)
Incremental credit to micro and small
enterprises (MSEs) has increased five times to Rs 1.23 lakh crore in the
post-GST period, an SBI research report Tuesday.
The credit growth to MSEs is quite stupendous
post-GST, the report by SBI Ecowrap said. The Goods and Services Tax (GST),
which subsumed most of the indirect taxes, was rolled out in July 2017 The Total Investment & Insurance
Solutions
For the 15-month period ended post GST, the
incremental credit to MSEs (under priority sector) has increased by five times
to Rs 1.23 lakh crore compared to Rs 25,700 crore during corresponding period
pre-GST, the report said.
The deceleration in credit in pre-GST period
was partly due to overall slowdown in economic activity, rising NPAs and
reclassification of food and agro-processing units from MSME category to
agriculture sector (as per the revised priority sector lending guidelines,
2015), it said. "The jump in credit to MSE sector bodes well regarding the
formalisation of the Indian economy and hence the ensuing benefits," said
Ecowrap.
According to International Finance
Corporation NSE 0.00 % (IFC) estimates, the potential demand for India's MSME
finance is about USD 370 billion as against the current credit supply of USD
139 billion, resulting in a finance gap of USD 230 billion.
The report said even as credit growth still
remains in comfort territory though slowing down, "we are now more
concerned over a growth slowdown".
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