Indian Economy News

Priority sector credit worth US$ 19 billion (Rs. 15 lakh crore) has been deployed to micro and small units in December 2022: RBI data

  • IBEF
  • February 3, 2023

The priority sector loans to the micro and small enterprises (MSEs) by scheduled commercial banks saw an 11.2% year-on-year (YoY) growth in December 2022, according to the latest monthly data on sectoral deployment of bank credit by the Reserve Bank of India (RBI). The credit to MSEs jumped from US$ 170 billion (Rs. 13.72 lakh crore) in December 2021 to US$ 190 billion (Rs. 15.26 lakh crore) in December 2022.

It has also been reported that the credit to mid-sized businesses under priority sector lending also increased by 13.5% on a year-on-year basis in December 2022. The banks deployed US$ 47 billion (Rs. 3.86 lakh crore) in December 2022. In December, the aggregate credit deployed to the overall micro, small, and medium enterprises (MSME) sector, including MSEs and medium enterprises, was US$ 230 billion (Rs. 19.12 lakh crore), which constitutes 14.3% of the total bank credit including food and non-food credit.

The agriculture and allied industries sector raised maximum loans amounting to US$ 200 billion (Rs. 16.17 lakh crore) in December 2022, registering a 14.8% increase from December 2021.

In order to boost credit to the MSME sector, the finance minister, Mr. Nirmala Sitharaman, announced a revamping credit guarantee scheme in the Budget 2023 under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with the infusion of US$ 1.1 billion (Rs. 9,000 crores) in the corpus, effective April 1, 2023. The revamp will enable additional collateral-free credit of US$ 24 billion (Rs. 2 lakh crore) to MSMEs while the cost of credit will be reduced by 1%.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.