The bad loan ratio in the micro, small and medium enterprises (MSMEs) segment stand at 12.5 per cent as of January 2020, a report by TransUnion CIBIL and SIDBI showed. While the non-performing assets (NPAs) ratio in micro segment was 9 per cent, the small and medium segments showed higher proportion of loans going sour at 11 per cent.
Among lenders, the private sector banks exhibited NPA levels in the range of 3-5 per cent in the MSME segment whereas, NPA level of public sector banks has increased from 18 per cent in December 2018 to 19 per cent in December 2019.
NBFCs have also witnessed an increase in NPA rates. The total on-balance sheet commercial lending exposure in India stood at Rs 64.45 trillion as of January 2020 of which the MSME segment holds Rs 17.75 trillion credit exposure. Within the MSME segment, Micro segment borrowers (aggregate credit exposure < Rs 1 crore) observed robust fresh credit disbursals worth Rs 92,262 crore in 2019.
Interestingly, public sector banks have regained some of the market share they lost to the shadow lenders giving credit to this segment. As of December 2019, public sector bank’s market share stood at 49.8 per cent in overall MSME lending book, with highest market share in micro segment at 59 per cent.