Watch out for MSME risk build-up amid Covid-19 pandemic, says report

The default rates in September 2020 remained stable at 12.1 per cent, a level also seen in September 2019

The timely funding assistance backed by guarantee schemes spared micro, small and medium enterprises (MSMEs) from the hard knocks due to Covid-19 pandemic-induced downturn. But the system needs to be watchful of any risk build-up as the economy moves on the growth path, reveals an assessment by TransUnion Cibil-Small Industries Development Bank of India (Sidbi).  

The MSMEs in industry sectors that are dependent on consumer discretionary spends — hospitality, logistics, and textiles — show higher downgrades. The micro units have been impacted the most due to economic slowdown, compared to medium- and small-sized firms. 

According to MSME Pulse, a joint report of