The growth of the Micro, Small and Medium Enterprises (MSME) sector is key to the composite development of a developing economy such as India.
The MSMEs are a vital cog in the socioeconomic wheel of Uttar Pradesh, which is home to more than 9 million units – the largest in India.
As such, the Yogi Adityanath government has been dexterously pushing for increasing the credit flow to the MSME sector for economic development, job creation and self employment.
In this context, the MSME loans have jumped nearly 20 percent to over Rs 2.48 trillion in UP.
Against the MSME advances of Rs 2 trillion in the financial year 2023-24, the MSME credit in 2024-25 hit Rs 2.48 trillion.
In 2022-23, the MSME credit extended by the banks in UP was to the tune of Rs 1.68 trillion.
The Yogi government has been nudging banks to increase the flow of credit to the MSMEs.
The increasing flow of credit to small businesses will foster the state’s ‘Make in UP’ and ‘Brand UP’ vision while retaining our skilled manpower and aspirational youth.
Not only MSME loans, but the state government is also facilitating the bottom of the pyramid financial support to the micro rural based enterprises.
While the commercial banks are predominant in the urban and semi-urban pockets, the cooperative banks and microfinance institutions are providing the ‘last mile’ credit access to the rural micro entrepreneurs especially women.
UP’s microfinance outstanding is nearly Rs 40,000 crore at present with the number of borrowers estimated at 20 million.
The growing network of expressways and mega infra projects in UP are unlocking the microfinance credit potential in the hinterland, positioning UP as a key state for financial institutions going forward.
East UP accounts for the highest 46 percent of UP’s microfinance outstanding. The Western and Central regions account for 40 percent and 14 percent of the advances.