Uttar Pradesh clocks highest MSME credit growth at Rs 570 billion

Uttar Pradesh has clocked highest growth in the Micro, Small and Medium Enterprises (MSME) credit with total outstanding of Rs 570 billion at the end of December 2017.

Between December 2016 and December 2017, UP registered MSME credit growth of 21%, which is double compared to the corresponding figures in highly industrialised states of Gujarat and Maharashtra having growth rates of 10.7% and 10% respectively. UP was followed by Andhra Pradesh 18.6%, Rajasthan 18.3% and Haryana 18%.

However, in value terms, the total MSME credit flow in Maharashtra during Dec 16-Dec 17 at Rs 1.23 trillion was more than double compared to UP at Rs 570 billion. Tamil Nadu, Gujarat and Andhra Pradesh followed next in line with total MSME credit flow of Rs 820 billion, Rs 672 billion and Rs 671 billion respectively. UP ranks 5th in the domestic MSME credit flow chart, according to a Small Industries Development Bank of India (SIDBI) report.

The five states collectively account for about 45% of the total MSME credit in the country.

Meanwhile, the Non-Performing Assets (NPA) of the MSME segment in UP stood at 8.3% at the end of December 2017, much lower than the corresponding figures in Maharashtra at 11.5%, West Bengal 12.5 %, Delhi 10.3% and Andhra Pradesh 9.9%.

Talking to Business Standard, SIDBI CMD Mohammed Mustafa said the NPA levels in the MSME space were lower as compared to the large industries, while the composite credit growth was also healthy in the sector.

In the backdrop of the Yogi Adityanath government taking proactive steps to boost MSMEs for economic growth and job creation, he said SIDBI was looking forward to supporting the MSME initiatives especially with regards to the proposed Defence Manufacturing Corridor in Bundelkhand and the rail auxiliary park in Fatehpur. These two mega projects were announced by the Centre at the UP Investors Summit 2018 in Lucknow, where the state garnered total investment proposals of Rs 4.68 trillion.

Besides, the Bank is confabulating with the state to offer financial advisory services apart from adopting 10 districts for state-of-art credit interventions in UP. “We have launched a pan-India programme to promote entrepreneurship and create a network of master entrepreneurs, who would be seed funded by SIDBI so that their business models encourage other youth and they could also be replicated.”

Under the programme, Mustafa informed, each year 100 people would be supported by SIDBI with funds and other support after a national level competition among the engineering and management students. The Bank has selected UP, Bihar, Madhya Pradesh and Odisha in the first phase, he added.

Meanwhile, to mark its foundation day and usher in SIDBI 2.0, the Bank launched ‘MSME contact programme’ to forge closer ties with MSMEs and create awareness about its various schemes.