Credit and Finance for MSMEs: The volume share of micro, small and medium enterprise (MSME) loan borrowers in the auto and auto components industry, which had close to 1.29 lakh borrowers as of June 2020, stood at 90.55 per cent as of June 2020. Amid Covid, this increased marginally from 89.51 per cent during the year-ago period and 88.88 per cent as of June 2018, according to the latest data from SIDBI and credit bureau CRIF. The share of credit to micro borrowers in the industry was the largest at 58 per cent (79,960 borrowers), having increased by over 7 per cent from 53.98 per cent as of June 2019. However, the share of small and medium borrowers declined slightly from 24.93 per cent to 23.91 per cent and from 10.60 per cent to 8.64 per cent respectively during the said period, the data from the Indian Auto and Auto Components Industry January 2021 report by SIDBI and CRIF showed.
In terms of the value or the size of the loan, the share of micro-enterprises was 9.79 per cent worth Rs 11,000 crore as of June 2020 that increased from 4.43 per cent worth Rs 4,000 crore as of June 2019. However, small enterprises share had slipped from 11.32 per cent worth Rs 11,000 crore as of June 2019 to 4.31 per cent worth Rs 5,000 crore as of June 2020. While the loan size of Rs 14,000 crore for medium enterprises didn’t change from the preceding year, their share dropped from 14.22 per cent to 12.17 per cent. The overall MSME share in the loan value as of June 2020 stood at 26.27 per cent down from 29.97 per cent from June 2019.
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In terms of the non-performing assets (NPAs), delinquencies for the MSME borrower segment had more or less remained constant in terms of absolute value. However, it reduced as a percentage of the overall portfolio over June 2019. As of June 2020, NPAs for micro, small, and medium enterprises stood at 7.35 per cent, 7.64 per cent, and 6.71 per cent of the loan borrowers respectively down from 9.22 per cent, 8.89 per cent, and 6.99 per cent respectively as of June 2019.
Within the top clusters of Mumbai-Pune, Delhi-Gurugram-Faridabad, Chennai, Bengaluru, Jamshedpur-Kolkata, Ludhiana-Jalandhar, Sanand, and Pithampur, credit availed by the MSME borrowers constituted only 17 per cent of the total credit value as of June 2020, standing at Rs 15.31K crore. The sector witnessed a growth of 2.4 per cent year-on-year mainly on account of the Delhi-Gurugram-Faridabad and Mumbai–Pune cluster that witnessed 13.3 per cent and 6.5 per cent annual growth respectively. Ludhiana-Jalandhar cluster and Pithampur cluster saw the highest utilisation of working capital loans at 57 per cent, while the Ludhiana-Jalandhar cluster saw the highest utilisation of term loans at 55 per cent as of June 2020.
