An SBI research reported that the progressive credit given to the MSEs (Micro and small enterprises) has been increased to Rs 1.23 crore i.e. five times after the GST.
Ecowrap said, “The jump in credit to MSE sector bodes well regarding the formalization of the Indian economy and hence the ensuing benefits”. The report by SBI Ecowrap said that after GST, the credit growth to MSEs has been remarkable.
The GST (Goods and Services Tax) came to existence in July 2017 which involve almost all the indirect taxes.
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The report said that as compared from before GST which was Rs 25, 700, the incremental credit to MSEs has been increased by five times i.e. Rs 1.23 lakh crore for the 15-month period ended in after GST.
It also said that the decrease in credit before GST period was partial because of the decrease or overall slowdown of in raising NPAs, economic activity and classify anew of food and agro-processing units from MSME category to agriculture sector (according to the modified priority sector lending guidelines, 2015).
Ecowrap said, “The jump in credit to MSE sector bodes well regarding the formalization of the Indian economy and hence the ensuing benefits”.
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As per the IFC (International Finance Corporation) evaluation, the prospective demand for India’s MSME finance is approximately USD 370 billion as compared with the current credit supply of USD 139 billion, coming at a finance gap of USD 230 billion.
The report said, “even as credit growth still remains in comfort territory though slowing down, we are now more concerned over a growth slowdown”.
