MSME Credit Deployment Sees 17.1% YOY Growth in July

MSME credit deployment continues to grow, with scheduled commercial banks deploying Rs 8.43 lakh crore to retail and wholesale traders in July, a 17.1% increase from the same period last year. This growth is part of the overall non-food credit deployed across sectors, which stood at Rs 147.82 lakh crore in July. The expansion of the MSME definition to include retail and wholesale trade in July 2021 has contributed to this growth, with retailers and wholesalers required to register on the government's MSME registration portal, Udyam. Retail sales for the month of July saw a growth of 9% year-on-year, with Southern India showing a 12% growth in sales, followed by Western India with 9% growth.

Key Takeaways:

Scheduled commercial banks deployed Rs 8.43 lakh crore to retail and wholesale traders in July, a 17.1% increase from Rs 7.20 lakh crore deployed in July last year.
Retailers saw a 19.3% increase in bank credit deployment in July, with wholesale traders seeing a 14.9% increase from the same period last year.
The overall non-food credit deployed across sectors in July was Rs 147.82 lakh crore, with retail and wholesale trade accounting for 5.7% of this total.
Retail sales for the month of July witnessed a growth of 9% year-on-year, with Southern India showing a 12% growth in sales, followed by Western India with 9% growth.
Quick Service Restaurant (QSR) and Food & Grocery reported a growth of 15% and 14% respectively, followed by jewellery (12%) and sports goods (11%) in terms of categories.
Retailers and wholesalers were required to register on the government's MSME registration portal, Udyam, as part of the MSME definition expansion to include retail and wholesale trade in July 2021.

Statistics:

Rs 8.43 lakh crore: Bank credit deployed to retail and wholesale traders in July (17.1% YOY growth)
Rs 7.20 lakh crore: Bank credit deployed to retail and wholesale traders in July last year
Rs 4.22 lakh crore: Bank credit deployed to retailers in July (19.3% YOY growth)
Rs 3.53 lakh crore: Bank credit deployed to retailers in July last year
Rs 4.20 lakh crore: Bank credit deployed to wholesale traders in July (14.9% YOY growth)
Rs 3.66 lakh crore: Bank credit deployed to wholesale traders in July last year
Rs 147.82 lakh crore: Overall non-food credit deployed across sectors in July
5.7%: Share of retail and wholesale trade in overall non-food credit deployed across sectors in July
9%: Year-on-year growth in retail sales in July
12%: Growth in sales in Southern India in July
9%: Growth in sales in Western India in July
7%: Growth in sales in Northern and Eastern India in July
15%: Growth in QSR category in July
14%: Growth in Food & Grocery category in July
12%: Growth in jewellery category in July
11%: Growth in sports goods category in July

Sources:

Reserve Bank of India (RBI) on bank credit deployment to various sectors
Retailers Association of India (RAI) survey on retail sales in July