Loans to small and medium industry have contracted in the last two years
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Data on bank lending show the skewed nature of the economy in the last two fiscal years. As the chart shows, credit outstanding to the services sector and personal loans have done well, but it is industry that has been a problem. Within industry, outstanding loans to small and medium industry are now lower than two years ago. That is a measure of the distress in the industrial sector, because while large industries have access to other sources of funds, small industries do not.
Other avenues of lending that haven’t done so well include education loans, micro-credit, export credit, loans for tourism and to hotels and restaurants and wholesale trade. On the other hand, growth in credit card outstandings and for professional services has been high, albeit on a low base. The chart has the details.