MSME credit demand in June back to level before pandemic, says CIBIL

High credit growth was helped by government's lending scheme and it masks asset quality pain: Agency

Credit demand by micro, small and medium enterprises (MSMEs) increased to near pre-pandemic levels in June 2021, recovering after a drop in loan enquiries in April and May due to the second wave of Covid-19 infections, revealed the Small Industries Development Bank of India (Sidbi)-TransUnion CIBIL report.

The reading on the index of credit enquiries fell from 139 in March to 67 in April before inching up to 75 in May. It moved up to 95 in June. Lockdowns in cities in June to rein in the spread of the contagion led to a bounce-back in credit demand (measured as credit