Singh sees improvements in MSMEs’ risk profile
Around 54% of MSMEs are reporting a growth of over 10% Year-on-Year (YoY), underlining the sector’s strong post-pandemic momentum, according to an industry report on 11 April http://msme.gov.in.
However, growth in investments in Udyam-registered MSMEs has slowed from 61% in FY22 to 22% in FY23 and 23% in FY24, said the 3rd MSME Sampark Report by UGRO Capital Ltd, a leading DataTech NBFC focused on MSME lending from Mumbai.
The semi-annual report, prepared in partnership with Dun & Bradstreet, highlighted that 64% of MSMEs have resumed activity post-pandemic https://www.nseindia.com/.
“Large and medium businesses anticipate slower domestic growth in Q1 2025, while small firms remain optimistic. It is noteworthy that while capital costs are expected to remain high in Q1 2025, revised MSME classification criteria could drive further investment and expansion,” said the report https://www.commerce.gov.in/.
Shachindra Nath, Founder & Managing Director – UGRO Capital, said, “MSME Sampark has gone beyond just a report and is slowly becoming a movement that brings together industry leaders, policymakers and financial institutions to collaboratively shape the future of MSME financing. With the 3rd edition of MSME Sampark, we aim to elevate the discourse further by exploring the next phase of MSME credit delivery in India https://www.bseindia.com/.
“Our analysis reveals a nuanced picture. We see moderation in total loan disbursement in recent quarters, a trend reflecting more conservative lending practices across the industry. While this could be attributed to stricter risk assessments, it also presents an opportunity for NBFCs to play a more strategic role in bridging the credit gap.
“The increasing formalisation of MSMEs, as evidenced by lower cash percentages and improved debt-to-turnover ratios, especially among mature and larger businesses, is an encouraging sign https://sbi.com.in/.
“MSME Sampark’s 3rd edition reaffirms our commitment to empower India’s MSMEs with the right financial solutions, insights, and policy advocacy that drive their sustained growth.”
Dr. Arun Singh, Global Chief Economist – Dun & Bradstreet, elaborated, “Dun & Bradstreet’s sector risk ratings indicate improvements in the risk profile of MSMEs in 2024 from 2023, despite global and domestic economic uncertainties. Improvements in the MSMEs’ credit profile were also indicated through a decline in the gross non-performing assets (GNPAs) post-pandemic.
“The overall GNPAs touched a 12-year low in September 2024, with GNPA of large borrowers at 2.4% and of MSMEs at 2.2%, respectively, compared to 12.8% and 11% during early 2020. However, businesses have scaled back their optimism for capital expenditure as their outlook on managing financial risks has deteriorated, reflecting heightened uncertainty faced by them.”
The report is based on findings from analysis of 45,000+ MSMEs during 2021-2024 across 7 sectors.
UGRO Capital Limited is a DataTech Lending platform, listed on NSE and BSE, pursuing its mission of “Solving the Unsolved” for the small business credit gap in India, on the back of its formidable distribution reach and its DataTech approach.
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. Fiinews.com
