Credit growth flat for medium-size enterprises

Micro and small units registered growth in deployment of gross bank credit by 22.9% in 2013, on y-o-y basis, whereas medium enterprises, it was only 0.9%

The growth in deployment of gross bank credit to medium-sized enterprises has been among the lowest so far in 2013, while for micro and small units, it was among the highest, according to the Federation of Indian Micro, Small and Medium Enterprises, quoting the Reserve Bank of India (RBI) data.

Micro and small units registered a growth in deployment of gross bank credit by 22.9 per cent in 2013, on a year-on-year basis. But in the case of medium enterprises, it was only 0.9 per cent, RBI data on sectoral deployment of bank credit said.

The credit numbers show a dismal state of affairs in the medium scale companies while micro and small units have somehow managed to grapple with the situation arising out of the industrial slowdown.

Further, credit to the priority sector - including agriculture and allied activities and micro and small enterprises (MSEs) - was up 13.2 per cent. Under MSEs, growth in deployment of gross credit to manufacturing alone was 22.9 per cent, whereas growth in credit to the service sector was 13.2 per cent.

Moreover, the service sector - which includes transport operators, computer software, tourism, hotels and restaurants, shipping, professional services and trade - witnessed 11.6 per cent credit expansion by banks. Under the service sector, tourism, which comprises hotels and restaurants business, saw a credit expansion of 8.7 per cent.

The credit given to retail trade saw the highest growth, at 25.7 per cent, while it is the lowest for state-sponsored organisations, at 14.2 per cent. The priority sector includes agriculture, small-scale industries, cottage sector, tiny sector, export sector and other small business (service) firms.