Construction, food MSMEs fuel post-Covid credit rise

• India’s MSMEs related to food products, construction materials and investment in technology are the key drivers of economic growth in the sector in the post COVID era.

Growth Trend of the Sector:

• Companies that have seen an increase in borrowing in terms of percentage of total disbursal
• MSMEs related to food products have seen an uptick in borrowing from around 14 per cent in FY19 and FY20 to nearly 20 per cent in FY21 and FY22.
• During the same period, the construction materials industry has shown increased credit demand, going from around 4 per cent of the pie to over 7 per cent
• E-commerce continued to be strong through the course of pandemic, retail and food services sectors picked up about 12 months back, and travel has seen a strong revival over the past 6-9 months.
• Data from Global Alliance for Mass Entrepreneurship (GAME), show that delayed payments to the MSME sector have increased to Rs 10.7 lakh crore till the end of 2021.
• About 81 per cent of the total amount is owed to SMEs — Rs 4.29 lakh crore to small enterprises and Rs 4.44 lakh crore to micro enterprises.

MSME Sector in India