Chennai: Post-Covid, the ticket size of loans by lenders to MSMEs has increased while approval rates have fallen. This indicates cautiousness among lenders after the removal of pandemic relief measures.
Post-COVID-19, ticket size of loans is slowly rising across PSBs and NBFCs while it has dipped for private banks. The average ticket size of loans offered by public sector banks has risen from Rs 12.6 lakh to Rs 15.1 lakh between Q2, 2022 to Q4, 2023. In the case of NBFCs, it has gone up from Rs 19.7 lakh to Rs 23.4 lakh. However, it has come down from Rs 34.3 lakh to Rs 30.3 lakh for private banks, according to a report by Dun and Bradstreet and U Gro.
Segment-wise, the ticket size of loans to micro and small has increased while it has dipped for medium firms during this period. For micro firms, it went up from Rs 6.4 lakh to Rs 8.1 lakh, and for small firms from Rs 43 lakh to Rs 44.2 lakh. For medium firms, it came down from Rs 98.6 lakh to Rs 98.4 lakh.
The drop in the approval rate is greater in PSUs for both medium-risk and high-risk firms. NBFCs remain most cautious for high-risk firms. This also indicates that low-risk firms can access more credit while high-risk firms are finding it difficult to access funds from banks and NBFCs post-pandemic.
Approval rates in PSU banks for medium-risk companies are down from 58 per cent in Q4 FY21 to 39 per cent in Q4 FY23. In the case of private banks it is down from 54 per cent to 36 per cent and for NBFCs it came down from 46 per cent to 38 per cent. In the case of high risk companies, PSBs’ approval rate was down from 51 per cent to 15 per cent, private banks 43 per cent to 31 per cent and NBFCs from 30 per cent to 14 per cent.
While credit growth has been reported after the pandemic, the disparity in credit penetration across states needs to be addressed. Maharashtra, Gujarat, and New Delhi top the list in the distribution of debt, while Light Engineering, Hospitality, and Healthcare are the sectors that attracted the most debt.
