Commercial lending stood at Rs 54.2 trillion as of March 2018, with micro and SME (small and medium enterprises) segments contributing nearly 23 per cent to overall growth.
“Total on-balance-sheet commercial lending exposure of banks and financial institutions stood at Rs 54.2 trillion, as of March 2018 with micro and SME segments constituting Rs 12.6 trillion, which is nearly 23 per cent of outstanding commercial credit,” a Cibil-Sidbi report said on Wednesday.
In March this year, large companies contributed to nearly 67 per cent of outstanding commercial credit, with a delinquency rate of 18 per cent as against up from 16 per cent in March 2017, the report said.
The directional reduction in NPAs (non-performing assets) of the mid-corporate segment (from 16.3 per cent in March 2017 to 15.9 per cent in March 2018) may be attributed to bad debt being sold to ARCs (asset reconstruction companies) and uptick in loan growth in this segment, the report said.
The quarterly additions to NPAs show steepest rise between the second and third quarters of FY18. Dud loans at MSMEs have remained stable and range bound during the period with micro segment moving down from 8.9 per cent in March 2017 to 8.8 per cent in March.
In the SME segment, the NPA rate hovered between 11.4 per cent in March 2017 and 11.2 per cent in March 2018. Future NPAs in the MSME segment may be driven by Rs 11,000 crore exposure, which are currently tagged as ‘standard’ but belongs to entities that have at least one or more exposures tagged as NPAs by other bank or credit institution, the report said.
It said private banks and NBFCs have further increased their market share in micro and SMEs lending to 30.3 per cent and 10.9 per cent in March from 27.5 per cent and 9.1 per cent in March 2017. Share of state-run banks has fallen from 57 per cent to 50.4 per cent during the reporting period.
“Data shows the MSME segment has left behind short-term impact of GST and demonetisation. They are back on growth path with exposure below Rs 25 crore growing at 25 per cent. High growth in new credit shows positive impact of GST,” said Sidbi chairman and MD Mohammad Mustafa.