While the banks are resisting themselves from lending to the MSMEs due to the sharp rise in the Non-Performing Assets (NPAs), NBFCs are coming forward to help the segment keeping its growth potential in mind, according to Crisil, a global analytical company.
Further, the current MSME lending market size is estimated to be around Rs 14 lakh crore.
The study also revealed the lending services to MSMEs will soon witness an annual growth of 11 per cent in the next two years. This support to the MSMEs will enable NBFCs to register a four-fold increase credit book over the past five years.
“Opportunities to lend to SMEs is huge but continuous tracking of sectors is crucial for managing risks,” the study says.
“Sharper focus on small-ticket loans, adoption of technology and data analytics and giving greater thrust to smaller towns and cities would give the NBFCs an edge over banks to lend to this segment,” the report notes.