CGTMSE: 6 lakh MSE loans approved under SIDBI’s credit scheme; Bajaj Finance, Union Bank top lenders

Credit and Finance for MSMEs: The credit guarantee fund trust for micro and small enterprises (CGTMSE), which operates the collateral-free credit guarantee scheme for MSEs, has approved 5.99 lakh loans for an amount of Rs 30,216.62 crore in the FY21 so far, according to the latest data from the MSME Ministry’s MSME Dashboard. Among the member lending institutions, Bajaj Finance led the tally in approving the highest number of loans – 1,95,855 for an amount of Rs 4051.31 crore followed by Union Bank of India approving 84,951 loans involving Rs 2,655.80 crore, Canara Bank approving 57,875 loans with an amount of Rs 3,607.87 crore, Punjab National Bank approving 48,970 loans involving Rs 1,743.89 crore, etc.

Importantly, according to the data from the Reserve Bank of India’s February bulletin, the MSME sector accounted for a share of around 18 per cent in the total credit to the industry and around 5 per cent in the total non-food credit extended by the scheduled commercial banks in November 2020. The sector’s gross bank credit deployment in December 2020 was up 6.6 per cent to Rs 11.31 lakh crore from Rs 10.61 lakh crore during the year-ago period.

Also read: Bank credit to micro, small businesses up over 6% in December from year-ago amid Covid, shows RBI data

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Under the CGTMSE scheme, which provides credit guarantee to financial institutions to provide collateral-free loans to small businesses, the loan disbursal limit was increased from Rs 1 crore to Rs 2 crore, former MSME Minister Giriraj Singh had said in February 2019, according to a statement by the ministry. Also, the scheme’s corpus was enhanced from Rs 2.5 lakh crore to Rs 7.5 lakh crore rupees. In FY20, 8,38,947 loan applications were approved vis-à-vis 4,35,520 applications in FY19. The number of applications approved by CGTMSE in FY20 was also the highest in the preceding five financial years, according to the MSME Ministry’s data.

Importantly, as of December 12, 2020, banks had accorded guarantee approval to 67,171 loan accounts of women entrepreneurs for an amount of Rs 3,366.63 crore in the current financial year, according to the data shared by the MSME Minister Nitin Gadkari in a written reply to a question in the Rajya Sabha.