Why does everybody want to lend to MSMEs?
1) The delinquency rate for MSME loans has dipped from 4.4% to 3%
2) The overall disbursement growth has been 24%
3) The micro sector has seen a whopping 54% year-on-year growth
4) Active MSME borrowers today in the country – 80 Lakhs
5) About 24 lakh crore has been deployed in this segment
The main challenge in this segment is the “deployment of funds.”
Suppose the funds taken are deployed for personal use instead of business use. In that case, it will become challenging for the MSMEs to accrue the benefit of this additional capital, increase the business, and service the loan.
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