Credit and financing for MSMEs: The volume share of micro, small and medium enterprise (MSME) loan borrowers in the automotive and automotive components industry, which had nearly 1.29 lakh of borrowers as of June 2020, stood at 90.55 % in June 2020. In the midst of Covid, this increased slightly from 89.51% during the period last year and to 88.88% in June 2018, according to the latest data from SIDBI and the CRIF credit bureau. The share of credit to micro-borrowers in the industry was highest at 58% (79,960 borrowers), after increasing by more than 7% from 53.98% in June 2019. However, the share of small and average borrowers decreased slightly from 24.93% to 23.91% and from 10.60% to 8.64% respectively during the said period, data from the January 2021 report of Indian industry showed. automotive and automotive components by SIDBI and CRIF.
In terms of loan value or size, the share of microenterprises was 9.79% valued at Rs 11,000 crore in June 2020, compared to 4.43% valued at Rs 4,000 crore. Rs in June 2019. However, the small businesses split had slipped from 11.32% valued at Rs 11,000 crore in June 2019 to 4.31% valued at Rs 5,000 crore in June 2020 While the loan amount of Rs 14,000 crore for medium-sized businesses has not changed from the previous year, their share has fallen from 14.22 percent to 12.17 percent. The overall share of MSMEs in loan value in June 2020 was 26.27%, compared to 29.97% in June 2019.
In terms of non-performing assets (NPAs), defaults in the MSME borrower segment have remained more or less constant in absolute terms. However, it decreased as a percentage of the overall portfolio compared to June 2019. In June 2020, the APMs for micro, small and medium enterprises were respectively 7.35%, 7.64% and 6.71% of loan borrowers, compared to 9.22%, 8.89% and 6.99% respectively in June 2019.
In the main groups of Mumbai-Pune, Delhi-Gurugram-Faridabad, Chennai, Bengaluru, Jamshedpur-Kolkata, Ludhiana-Jalandhar, Sanand and Pithampur, the credit used by MSME borrowers accounted for only 17% of the total credit value in the June 2020, standing at Rs 15.31K crore. The sector grew by 2.4% year-on-year, mainly due to the Delhi-Gurugram-Faridabad and Mumbai-Pune cluster which saw annual growth of 13.3% and 6.5% respectively. The Ludhiana-Jalandhar cluster and the Pithampur cluster recorded the highest use of working capital loans at 57%, while the Ludhiana-Jalandhar cluster recorded the highest use of term loans at 55% in June 2020.