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Credit demand from women-led MSMEs doubled this festive season from pre-pandemic levels: Survey

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Credit and demand for MSMEs: MSME-focused non-banking financial company NeoGrowth on Thursday said the credit demand from women-led MSMEs doubled by the end of the festive months of 2022 from the pre-pandemic festive season of July-October 2019. Based on a survey conducted by NeoGrowth, the company said the two-fold rise in credit requirements of women-led small businesses was driven by strong consumer demand post-economic revival and subdued festive season spending over the past two years.  

Bengaluru, Hyderabad, and Mumbai were the top three cities in terms of credit demand. Other cities showing strong credit demand this festive season include Vijaywada, Ahmedabad, and Kolkata. Among categories, fashion & lifestyle, food and beverages, FMCG and retail saw higher credit inquiries as compared to other sectors, as the festive period concluded in October this year.

Arun Nayyar, Whole-Time Director and CEO, NeoGrowth, said the convenience and affordability of transacting through digital payments fuelled festive demand this year. “The festive season proved to be reasonably strong for the industry, after two years of Covid-19 disruption. Backed by this buoyant consumer demand pan-India, we registered that women MSMEs, in particular, sought more credit across business segments.” 

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To analyse the festive credit demand among MSMEs, NeoGrowth computed growth based on the comparison of credit inquiries received from over 30,000 MSMEs during the pre-pandemic festive months July-October of 2019 and 2022. 

Overall credit demand from MSMEs in the FMCG and retail segment increased by 2X in the 2022 festive months as compared to the same period in 2019. Moreover, there was around a 70 per cent surge in credit demand from consumer durables and electronics retailers. Furthermore, the fashion & lifestyle segment witnessed a nearly 40 per cent uptick in MSME credit demand this year, as compared to 2019.  

NeoGrowth said it has disbursed over $1 billion in loans to MSMEs so far. Meanwhile, according to a Redseer report estimates, e-commerce firms had registered a 27 per cent growth, with sales worth Rs 40,000 crore during the seven-day festive season sale this year.

Also read: 43% of MSMEs likely to remain below pre-Covid EBITDA margins in FY23: Crisil



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