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Non-food credit offtake rises 8.8%; SME loans up 4.6%

Credit offtake by big industry rose by 0.8 per cent as against a contraction of 2.3 per cent in the previous year.

By: ENS Economic Bureau | Mumbai | Published: December 30, 2017 1:28 am

Aided by a rise in loan offtake by the industry, overall non-food credit offtake rose by 8.8 per cent in November 2017 as against 4.8 per cent in the same month a year ago, the Reserve Bank of India (RBI) said on Friday. In October this year, non-food bank credit had risen by 6.6 per cent.

Significantly, advances to the industry rose by one percentage point in the reporting month compared to a 3.4 per cent point contraction in the year-ago month. According to the Reserve Bank of India data, loan offtake by small and micro industry rose by 4.6 per cent during the year ended November 2017 as against a decline of 7.7 per cent in the previous year. Loans to this sector rose by Rs 15,700 crore to Rs 359,200 crore in a year.

Soon after demonetisation of Rs 500 and Rs 1,000 notes in November 2016, thousands of small units were in dire straits and many of them had shut down operations. Most of them also defaulted on loan repayments. Credit offtake by big industry rose by 0.8 per cent as against a contraction of 2.3 per cent in the previous year.

However, credit offtake by medium industry continued to decline by 8.3 per cent as against a decline of 10.1 per cent. The overall credit outstandings to the industry were Rs 26,04,100 crore as of November 2017. However, credit to agriculture and allied activities increased by 8.4 per cent in the reporting month which is slower than the 10.3 per cent growth in the same month last year. Personal loans increased by 17.3 per cent compared to 15.2 per cent growth in the same moths last year.

“Credit to major sub-sectors such as infrastructure, vehicles, vehicle parts and transport equipment, basic metal and metal products and mining & quarrying contracted,” the central bank said. However, credit growth to textiles, chemical & chemical products, all engineering, food processing and construction accelerated. Loans to the services sector increased by 14 per cent in the month, compared with 7.1 per cent in November last year, according to the Reserve Bank of India data.

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