State MSMEs are in decline, says survey




Reflecting the hiccups in the local economy, a recent survey on opportunity and risk in medium, small and micro enterprises has shown that overall business of Goan MSMEs has been declining as fewer units are actively seeking funds for expansion or growth.

The state, which was ranked 16th in 2015-16, slipped to 20th position in 2018-19 in credit opportunity and risk, according to a CRISIL-SIDBI  survey released in June 2019.

The ranking has shown that overall performance of Goan MSMEs is going down as they are taking fewer loans for capital expenditure or working capital from banks or other financial institutions.  

MSMEs comprise the largest chunk of Goan industry, and their ability to take loans is an indication of industrial growth in the state. Goa’s position in the MSME opportunity and risk index is only better than states like Jharkhand

and the North-East, which have been ranked at 21st and 23rd positions respectively.

The CRISIL-SIDBI survey published in the June edition of ‘Market Pulse’, a monthly publication of the SIDBI, has also ranked states in business lending to individual units, in which too Goa has slipped to a lower position from 14th place in 2015-16 to 22nd position in 2018-19.

For sometimes, industry associations in the state have been complaining of slowdown in business with dealers of automobiles and consumer durables reporting lower sales.

Local bank branches have also raised the issue of poor takers for bank loans.

The survey results have shown that high market size and high growth (of small units) result in better rankings. The survey has shown that several states have improved their rankings.

Gujarat has emerged as the top ranking state in terms of performance and credit growth potential for MSME units followed by Andhra Pradesh, Haryana, Karnataka and Delhi.

The survey has categorised MSMEs as units with an aggregate credit exposure of less than Rs 50 crore.

The survey has said that total credit exposure stood at Rs 116.7 lakh crore as of 31 March 2019, of which, loans extended to large industry is Rs 41 crore, to MSME units it is Rs 17.6 crore and  the remaining exposure of Rs 52.6 lakh crore  is to individual lending, including consumer finance, retail, agriculture and priority sector lending.

According to the SIDBI-Goa, the survey tracks the MSME sector and is an insight to policymakers and also financial intermediaries as to which states gives opportunity for lending.

Since structured information in respect of MSME is not available, no early signs are available to help decision-makers and policymakers.