Surge in MSME Credit Demand Across India
The 59-minute loan approval scheme, launched in November 2018, allows MSMEs to get bank approval for collateral-free loans between Rs 10 lakh and Rs 5 crore within 59 minutes. The loans are for either term loans or working capital and are processed through the digital platform, Online PSB Loans.
The government of India's 59-minute loan approval scheme for Micro, Small, and Medium Enterprises (MSMEs) has seen growth, according to the latest data from the Ministry of MSME. As of August 30, 2024, the scheme has sanctioned 2.49 lakh loans worth Rs 86,820 crore, which is an increase of 1.21% from the previous year. This growth follows a similar pattern from the year before, which saw a 2.27% increase.
In terms of disbursements, the numbers show a similarly small rise. By August 30, 2024, 2.30 lakh loans, amounting to Rs 69,926 crore, had been disbursed. This is a mere 0.8% increase from the 2.28 lakh loans, worth Rs 68,729 crore, that were disbursed by September 1, 2023.
According to a report by credit bureau CRIF High Mark, the total MSME loan portfolio in India grew by 17.8%, reaching Rs 64.1 lakh crore as of March 2024. In the fiscal year 2024 alone, 2.74 crore MSME loans were issued, amounting to Rs 54.2 lakh crore. This represents a notable increase of 19.3% in the number of loans and a 5.4% increase in the value of those loans compared to the previous year.
These differences highlight a shift in lending patterns. The overall demand for MSME credit in India continues to grow rapidly, suggesting that businesses may be looking to other sources for funding.