Private banks’ & NBFCs’ share continues to increase
The report says the major chunk of growth in MSME lending in 3QFY2019 has come from private banks and NBFCs with their market shares increasing by 400 bps and 300 bps respectively. Public sector banks continue to be the major
provider of credit to MSMEs (40% share), but this has consistently reduced in the last 5 years (from 58% in 3QFY14). However, going forward, says the report, this trend is expected to moderate as more public sector banks come out of the PCA framework and the impact of liquidity issues shows up in the numbers for NBFCs.
The report also says public sector banks dominated the <`1 million NTC segment in MSME lending and private banks are gaining share in the `1 million - 100 million NTC segment in MSME lending. An analysis of NTC borrowers in the MSME segment of <`100 million ticket size shows robust growth of 20% yoy to `0.5 million in 2HFY2018 from `0.4 million in 2HFY2017. This has been driven by faster growth in the `10-100 million segment (24% yoy in 2HFY2018) with private banks gaining market share at the expense of public sector banks. Private banks have been less aggressive in the <`1 million segment where public sector banks still continue to be major players with steady 78% share in NTC additions. Credit to gross value added (GVA) ratio in the MSME segment increased 1500 bps in the last 5 years.