Bank credit growth to agriculture, industries, housing jump in FY24, Economy Survey shows

Housing loans saw credit disbursal jump from Rs 19.9 lakh crore in March 2023 to Rs 27.2 lakh crore in March 2024.

Banks' credit to segments like agriculture, industries and housing saw a jump in fiscal year 2024, the Economy Survey showed on July 22.

Agricultural credit increased nearly 1.5 times to Rs 20.7 lakh crore in FY24, from Rs 13.3 lakh crore in FY21. “The Kisan Credit Card (KCC) scheme has played a pivotal role in providing timely and hassle-free credit to farmers, with over 7.4 crore operative KCC accounts at the end of 2023,” the survey showed.

Credit to industries grew by 8.5 percent in March 2024, compared to 5.2 percent a year ago, driven by an increase in bank credit to small and large industries. “The boost in credit disbursal to Micro, Small and Medium Enterprises (MSMEs) has been supported by the availability of collateral-free loans with a 100 percent credit guarantee under the Emergency Credit Linked Guarantee Scheme (ECLGS),” the survey said.

The survey also showed that bank credit to the services sector remained resilient despite a slowdown in credit growth to NBFCs. It also showed that within the services sector, credit disbursal to the commercial real estate and trade sub-sectors improved in H2 of FY24. “Personal loans and NBFCs have the largest share of credit disbursed by banks. Within personal loans, housing loan growth remained range-bound during FY24, with signs of improvement in April and May 2024,” the survey showed.

Housing loans saw credit disbursal jump from Rs 19.9 lakh crore in March 2023 to Rs 27.2 lakh crore in March 2024.

However, personal loan growth moderated after December 2023 due to increased capital requirements for unsecured personal loans, credit cards and lending to NBFCs by the RBI from 100 per cent to 125 percent, the survey showed.