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India MSME Finance Market Outlook to 2020 - Driven by Government%s Financial Inclusion Agenda and Newfound Profitability in Segment

India MSME Finance Market Outlook to 2020 - Driven by Government%s Financial Inclusion Agenda and Newfound Profitability in Segment

  • March 2016
  • 170 pages
  • ID: 3940203
  • Format: PDF
  • By Ken Research Private Limited

Summary

Table of Contents

Executive Summary

Ken Research announced its latest publication on “India MSME Finance Market Outlook to 2020 – Driven by Government’s Financial Inclusion Agenda and Newfound Profitability in Segment” which provides a comprehensive analysis of the MSME Finance Market in India. The report covers various aspects such as market size of MSME finance market, demand-supply gap in MSME Finance and market share of various banks, NBFCs and Micro Finance Institutions. The report also provides competitive landscape and profile of major players operating in India’s MSME Finance Market. The future analysis of overall MSME market has also been discussed in each of the sub segment under base case scenario, aggressive case scenario and conservative case scenario. The report is useful for various banking and financial services institutions including new entrants operating in or planning to enter the market to align their market centric strategies according to ongoing and expected trends in the future.

MSME sector has become an important growth driver for the overall economy in India. The number of MSMEs has contributed to more than ~ % of the total industrial enterprises in FY’2015. The total credit outstanding from MSMEs was recorded at INR ~billion in FY’2015. The demand of credit has however grown significantly at a CAGR of ~% during FY’2010-FY’2015. The outstanding amount was observed the highest for micro enterprises in the year FY’2015.

The demand supply gap as percentage of demand reduced from ~% in FY 2010 to ~ % in FY 2015. The report also provides competitive landscape and profile of major players operating in MSME Finance Market of India. The future growth has been discussed under base case scenario, aggressive case scenario and conservative case scenario using scenario analysis. The report is useful for various banking and non-banking financial institutions including Fintechs operating in or planning to enter the market to align their market centric strategies according to ongoing and expected trends in the future.

Banks have been the major source of finance for the MSMEs and amongst them the Public sector banks (PSBs) play pivotal role. State Bank of India & its Associates has been leader in the PSBS for disbursing finance to MSEM followed by Punjab National Bank and Others. However, in case of private sector banks, ICICI Banks, HDFC bank and Axis Bank were the major players in the India MSME market. The market for MSME finance in India has also witnessed presence of various NBFCs, who have actively participated in market during FY’2015. Bajaj Finserv led the market in terms of total finance outstanding with ~% share, followed by Religare Finvest and Reliance Capital. However, in case of loans or finance from MFIs, Bandhan Bank emerged as the leading player in the market followed by SKS Microfinance, Annapurna Microfinance and others.

In the coming future, private sector financial institutions such as private banks, NBFCs and MFIs will look forward to provide more digitization of credit facilities. Penetration of digitization in India has already witnessed improvement in regular banking facilities and will likely result in more efficient systems to avail loans. During the period FY’2016-FY’2020, the market for MSME is projected to grow at CAGR of ~% and reach INR ~ million in FY’20 under conservative case scenario with 70.0% probability. In the conservative case, the negative outlook of the economy will hamper the MSME finance market in India will likely witness loans outstanding up to INR ~ billion by the year FY’2020 whereas the aggressive case will result in outstanding loans at INR ~ billion in FY’2020.

Online India MSME Finance Providers

The market of financial technology companies is at a very nascent stage. There are only a handful number of players in the online MSME finance space which provide MSME credit. The online MSME finance service providers collectively have disbursed loans worth INR ~ million in 2015. Some companies launched their operations in 2015. More companies are expected to join the bandwagon next year onwards. Investors have been showing an interest in these startups. As of FY’2015, the online market for MSME finance in India has seen presence of players such as Faircent, Indifi Technologies, LendingKart, SMECorner, Capital Float, Mandii.com and others.

Key Topics Covered in the Report

-MSME Finance Market Size by outstanding credit
-MSME Finance Market Segmentation by Source of Finance in Formal and Informal
-Formal Finance sub segmentation into Finance from Banks, MFIs and NBFCs
-Informal Finance sub segmentation into Family and Friends, Moneylenders and Chit Funds
-MSME Finance Market Segmentation by Region into Northern, North Eastern, Eastern, Central, Western and Southern Region
-MSME Finance Market Segmentation in Registered and Unregistered Enterprises
-MSME Finance Market Segmentation in Manufacturing and Service Enterprises
-Trends and Development in MSME Finance Market in India
-Value Chain for MSME Finance Market from the perspective of Borrower and Financial Institution
-Competitive landscape and profile of major Public sector Banks, Private Sector Banks, Micro Finance Institutions (MFIs) in MSME Finance Market.
-Growth Drivers of MSME Finance Market in India.
-Issues and Challenges MSME sector is facing in Financing
-Working Models and Revenue Models of Financial Technology companies such as Faircent, Capital Float, SMECorner, NTREES, Mandii
-Future Outlook using scenario analysis, projecting the future growth considering Base Case Scenario, Conservative Case Scenario, Aggressive Case Scenario
-Macro Economic Parameters


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