Chennai: Credit demand from micro, small and medium enterprises is about 85 per cent of what it was prior to the pandemic. However, those in non-metro cities have got back to pre-Covid levels, while those in metros are still lagging behind, finds a study.
The credit demand had come down to 94 per cent of the pre-Covid levels during the first wave of the pandemic. This further slipped to 85 per cent during the second and even in March 2022 after the Omicron wave, the demand remained around 85 per cent levels, according to a study by fintech company NeoGrowth.
In case of metro cities, demand is around 81 per cent levels as of March 2022. Non-metros have seen a rebound to 99 per cent of pre-Covid levels.
Even among metros, Bangalore at 124 per cent and Chennai at 102 per cent have seen demand moving above pre-Covid levels. In Hyderabad it is around 84 per cent, Delhi 76 per cent, Mumbai 59 per cent and Pune 50 per cent.
While looking at different sectors, infrastructure, FMCG and retail have grown over the pre-pandemic levels. All other sectors are below those levels. Services at 95 per cent, healthcare 84 per cent, consumer durables and electronics 79 per cent, petrol pump 74 per cent, automobile and food and beverages 71 per cent, fashion and lifestyle 71 per cent and spa and salon 69 per cent.
The study was conducted on a sample set of 20,868 MSMEs. The study also shows that 75 per cent of MSME borrowers who upgraded their pre-pandemic loans went for a higher amount with an 80 per cent average increase in the principal loan amount. MSMEs are now going digital with 66 per cent moving to online sales post Covid-19.
“Many MSMEs were struggling in 2020-21 due to the burden of loan repayments because of the cessation of demand from consumers. The vital lessons learned from the pandemic have transformed the way businesses operate and fast-tracked their move to digital. The credit demand from MSMEs is back to a healthy level,” said Arun Nayyar, Whole Time Director & Chief Executive Officer, NeoGrowth.
