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Business EconomyPosted at: Apr 8 2025 9:26PM


Growth in investments in MSMEs slowed down in FY24: Report

New Delhi, Apr 8 (UNI) Growth in investments in Udyam-registered MSMEs slowed down to 23% in financial year 2023-24 (FY24) from 61% in financial year 2021-22, as per a UGRO Capital-Dun & Bradstreet report released on Tuesday.
The findings are based on an analysis of over 45,000 MSMEs during 2021-2024 across seven sectors.
The report said that large and medium businesses anticipate slower domestic growth in the first quarter (Q1) of 2025, while small firms remain optimistic.
"It is noteworthy that while capital costs are expected to remain high in Q1 2025, revised MSME classification criteria could drive further investment and expansion," it said.
The report said that export sentiment among small and medium businesses has weakened amid geopolitical and trade protectionist concerns.
"Capital costs are expected to remain high in Q1 2025, influencing investment decisions. Medium-sized firms have scaled back optimism on capital expenditure, while small businesses show slight improvement," it said.
As per the report, credit growth has declined for micro and small businesses (15.5% in May 2024 to 10.1% in Nov 2024), remained stable for large businesses, and surged for medium-sized firms (12.6% in June 2024 to 20.0% in Nov 2024).
"We see moderation in total loan disbursement in recent quarters, a trend reflecting more conservative lending practices across the industry. While this could be attributed to stricter risk assessments, it also presents an opportunity for NBFCs to play a more strategic role in bridging the credit gap. The increasing formalisation of MSMEs, as evidenced by lower cash percentages and improved debt-to-turnover ratios, especially among mature and larger businesses, is an encouraging sign," said Shachindra Nath, Founder & Managing Director – UGRO Capital.
Added Dr Arun Singh, Global Chief Economist - Dun & Bradstreet, “Dun & Bradstreet's sector risk ratings indicate improvements in risk profile of MSMEs in 2024 from 2023, despite global and domestic economic uncertainties."
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