The third edition of TransUnion CIBIL- SIDBI MSME Pulse Report shows that commercial credit growth continues to rise steadily with 10.1% YOY growth in the Jun’18 quarter. The report further states that the total lending exposure in India stood at ₹101 lakh crores as of Jun’18 of which MSME credit accounts for ₹22.8 lakh crores, which includes credit to MSME entities and credit to individuals for business purposes. The NPA rates on MSME loans have remained stable and range bound. In the Micro entity segment, the NPA rate has declined from 8.9% (in Jun’17) to 8.7% (in Jun’18); in the SME entity segment the NPA rate hovered between 11.2% (in Jun’17) to 11.5 % (in Jun’18). It is interesting to note that NPA levels in loans taken by individuals for business purposes are significantly lower and have remained under 2.5%. MSME Pulse closely tracks and monitors the MSME segment in the country on a quarterly basis. TransUnion CIBIL Commercial Bureau has over 6.7 million live business entities ranging from proprietorship/partnership firms to publicly listed entities. The credit data is updated monthly with exposure and performance details from Banks, NBFCs, HFCs, Cooperative banks, Regional Rural Banks and other regulated lenders.
Speaking of this report,Mohammad Mustafa, Chairman and Managing Director, SIDBI said “The most noteworthy finding of this edition of MSME Pulse is the significant improvement in TAT on lending to MSMEs across credit institutions. Data shows that TAT has continuously improved for MSME segment underwriting- from an average of 32 days in 2016 to under 26 days in 2018, while at the same time usage of bureau data and digitization has increased. This finding signals a definite positive correlation between digitization and increase in efficiency of the commercial lending market. The report further delves into category-wise TAT, defined as the number of days between the date of enquiry and the date of loan sanctioned or renewal date. It indicates that NBFCs have demonstrated the lowest TAT on MSME lending at 18 days in 2018 from 24 days in 2016. While Public Sector Banks (PSBs) still have the longest TAT, they have demonstrated the maximum reduction in TAT for the MSME segment- from 41 days in 2016 to 31 days presently. Private bank TATs have also lowered from 32 days in 2016 to 29 days presently.
Highlighting the capabilities of data analytics and insights, the Managing Director and CEO of TransUnion CIBIL –Shri. Satish Pillai said “We continue to partner with financial institutions to help them drive efficiency and find interesting pockets of profitable growth. As a case in point, among the 4 segments within Commercial (Micro, Small, Mid and Large), MSME Pulse analysis shows that the Micro and Small segments continue to do well, posting healthy growth of 21% and 14% respectively, with delinquencies being stable for last 8 quarters (unlike Mid and Large segments, which have shown a reduction in loan growth and a significant increase in delinquencies). The valuable insights, products and solutions in the Commercial bureau space can significantly help in the sustainable growth of the Commercial credit sector.”
