Question : Loans to MSMEs

(a) the total number of Micro, Small and Medium Enterprises (MSMEs) units that have been granted loans by the banks across the country, bank, State/UT-wise;
(b) the total quantum of loans disbursed/sanctioned to MSMEs units during the last three years and the current years, bank-wise;
(c) the percentage of outstanding loans that have been recovered from the said MSMEs units along with the number of those MSMEs that have turned into defaulters;
(d) whether the Government has analysed the reasons for frequent hike of interest rates by financial institutions and sluggish flow of credits to MSMEs, if so, the outcomes thereof; and
(e) the corrective steps taken by the Government to ensure these MSMEs get adequate credit at a lower rate of interest ?

THE MINISTER OF STATE IN THE MINISTRY OF FINANCE


(a) & (b) :
Details of credit disbursed to Micro, Small and Medium Enterprises (MSMEs) units, Bank-wise and State-wise for the last three years are given at Annexure I and Annexure II, respectively.
(c) Data relating to percentage of outstanding loans recovered from MSMEs units is not maintained centrally.

(d) & (e) :
RBI has deregulated the interest rates on advances sanctioned by banks. As per extant framework, since April 01, 2016, banks have to compute actual interest rates on advances by adding the component of spread to the Marginal Cost of Funds based Lending Rates (MCLR) which is the internal benchmark for such purpose. Accordingly, the rate of interest charged by banks to the borrower varies from bank to bank and depends on various factors such as marginal cost of funds, operating cost, negative carry on account of Cash Reserve Ratio and tenor premium. As per RBI, there has been an increase of 6.80% in outstanding credit to MSMEs in 2017-18 over the corresponding previous year.

Government and RBI have taken several steps to facilitate provision of hassle free loans to MSMEs, which inter-alia include, advise to all SCBs to achieve 20% year-on-year growth in credit to Micro and Small Enterprises (MSEs), allocation of 60% of the MSEs advances to the micro enterprise accounts, a 10% annual growth in number of micro enterprise accounts, additional working capital limit to meet the requirements arising due to unforeseen/seasonal increase in demand, adoption of clusters, operationalising at least one specialised MSME Branch in every district, simplified computation of working capital requirements of MSE units to make it minimum 20% of the projected annual turnover of the unit for borrowal limits upto Rs.5 crore, increase in coverage of loan from Rs.1 crore to Rs.2 crore under Credit Guarantee Fund Trust for Micro and Small Enterprise (CGTMSE), Board approved policy for enhanced working capital to GST-registered MSMEs, etc.
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