Lok Sabha Question No. 1948 (UNSTARRED), answered on 2025-12-11
Subject: NPAs in MSME Loans
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Bapi Haldar

## GOVERNMENT OF INDIA

## MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 1948 TO BE ANSWERED ON: 11.12.2025

## NPAs IN MSME LOANS

1948. SHRI BAPI HALDAR:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the  details  of  the  assessment  by  the  Government  on  the  gap  between  sanctioned  and disbursed credit  to  Micro, Small and Medium Enterprises (MSMEs) during the last three years; and
- (b) the steps taken to address rising instances of MSME loans being classified as NPAs and delays  reported  in  Quality  Control  Order  compliance  due  to  high  testing  costs  and  limited infrastructure?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

(a) & (b): As informed by Reserve Bank of India (RBI), the credit disbursement to the MSME sector  by  Scheduled  Commercial  Banks  (excluding  RRBs)  during  the  last  three  years  are  as follows:

Amount (Rs. In crore)

| FY       | Micro Enterprises    | Micro Enterprises   | Small Enterprises    | Small Enterprises   | Medium Enterprises   | Medium Enterprises   | Total MSME           | Total MSME       |
|----------|----------------------|---------------------|----------------------|---------------------|----------------------|----------------------|----------------------|------------------|
| FY       | No. of A/c (in lakh) | Amount disbursed    | No. of A/c (in Lakh) | Amount disbursed    | No. of A/c(in Lakh)  | Amount disbursed     | No. of A/c (in lakh) | Amount disbursed |
| 2022- 23 | 84.20                | 6,43,150.40         | 7.83                 | 5,79,554.50         | 3.03                 | 4,74,033.35          | 95.06                | 16,96,738.26     |
| 2023- 24 | 118.25               | 8,95,633.99         | 10.02                | 7,16,599.44         | 4.29                 | 5,92,221.56          | 132.56               | 22,04,454.98     |
| 2024- 25 | 115.74               | 10,49,491.23        | 9.42                 | 8,34,267.31         | 4.83                 | 7,59,690.41          | 129.98               | 26,43,448.95     |

Source: Priority Sector Returns submitted by SCBs (excluding RRBs)

To strengthen and support the MSME sector, the Government of India has taken various steps which, inter-alia, include the following:

- (i) Gazette Notification dated May  29,  2015  provides  a  'Framework  for  Revival  and Rehabilitation of Micro, Small and Medium Enterprises' (FRR for MSMEs). Subsequently, RBI issued instructions vide its circular no. RBI/2015-16/338 FIDD.MSME & NFS.BC.No.21/06.02.31/2015-16 dated 17.03.2016 for implementation of the same. Subsequently,  RBI  issued  a  framework  for  revival  and  rehabilitation  (FRR)  vide  circular dated March 17, 2016 for MSME units having loan limits up to 25 crore.

- ii.   Emergency Credit Line Guarantee Scheme launched for businesses, including MSMEs with a  provision  to  provide  a  cover  for  Credit  Guarantee  to  the  tune  of  Rs  5  lakh  crore.  The scheme was operational till 31.03.2023. As per a research report dated 23.01.2023 of the State Bank of India on Emergency Credit Line Guarantee Scheme, about 14.6 lakh MSME accounts of which about 98.3% were in the MSE category were saved from being NPAs.
- iii.  Credit  Guarantee  Scheme  (CGS) for  Micro and  Small  Enterprises (MSEs) through Credit Guarantee  Fund  Trust  for  Micro  and  Small  Enterprises  (CGTMSE)  to  provide  credit guarantee  for  loans  upto  Rs.  10  crore  (w.e.f  01.04.2025)  extended  by  Member  Lending Institutions to MSEs.

As informed by Bureau of Indian Standards (BIS), various steps has been taken to provide financial and technical support to MSME sector. Some of them are as under:

- i. Concession of 80% (for Micro enterprises / Start-up units), 50% (Small enterprises) and 20% (Medium enterprises) by BIS as financial incentives in annual minimum marking fee with  an  additional  concession  of  10%  to  units  located  in  north-east  areas  or  women entrepreneur MSMEs.
- ii. The requirement of maintaining in-house laboratory has been made optional for MSMEs. MSMEs are also allowed to utilize the services of outside BIS recognized laboratories and NABL accredited labs.
- iii.  'Levels  of  Control'  prescribed  with  the  Scheme  of  Inspection  and  Testing  are  made recommendatory in nature.
- iv.  For  domestic  manufacturers,  product  certification  activities  and  processes  have  been digitized  through  an  online  platform  'Manak  online'.  The  renewal  of  certifications  for domestic manufacturers has also been made automatic without any human intervention.

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