Corporate credit demand gains pace, showing signs of gathering steam

Economic growth pushing working capital need; insolvency cases create more refinancing demand

The demand for credit from companies in the manufacturing and services sectors is moving up, in tandem with economic growth showing clear signs of gathering steam.

Senior executives with banks and finance companies said while working capital has a major share in this higher demand, corporates are also beginning to seek credit for creating new capacities and to finance acquisitions, thanks to insolvency proceedings.

Refinancing of older credit also has a significant share, they add.

“Corporate credit has picked up this fiscal (2018-19). Last fiscal (FY18), it was less than five per cent (growth), with a low base. We are