A Study on Credit Appraisal practice for Micro, Small and Medium Enterprises Lending and their Impact on NPA Trends of STATE BANK OF INDIA (2019 -22025)

Km Sristi Kesari; Prof. Subarna Sarkar

doi:10.36948/ijfmr.2026.v08i05.87339

A Study on Credit Appraisal practice for Micro, Small and Medium Enterprises Lending and their Impact on NPA Trends of STATE BANK OF INDIA (2019 -22025)

Author(s)	Km Sristi Kesari, Prof. Subarna Sarkar
Country	India
Abstract	Micro, Small and Medium Enterprises (MSMEs) are one of the important pillars of the Indian economy. This industry plays a significant role in the Indian economy by contributing to GDP (30%), generating maximum employment, upgrading people's lifestyles, practically applying culture, skill and technology, and leading in export promotion. Even so, this industry is facing several problems, such as financial difficulties, technological usage issues, unregulated markets, and lack of marketing skills. Among these, the biggest problem is the non-availability of adequate and timely credit. Since they depend on banks for credit, banks screen and evaluate them before extending credit. This is done to minimise the risk of credit defaults. Through this paper, we will analyse the credit appraisal practices of the State Bank of India (SBI). We will examine the asset quality of the bank, focusing on how much of the loans given by the bank have turned into an NPA (Non-Performing Asset). Secondary data sources have been used in this paper, such as: RBI Reports, SBI Annual Reports, peer-reviewed journals, and articles. Broadly, it is concluded that the NPA ratio of loans given to the MSME sector by SBI has dropped from 9–10% in March 2021 to 3.3–3.6% in 2025. Changes and improvements have been made by SBI from time to time in its credit appraisal practices so that it becomes easier for MSMEs to obtain loans. This includes CGTMSE, a digital data-driven credit assessment model, tighter underwriting standards, and credit discipline.
Keywords	Credit Appraisal, NPA Trends in SBI, Credit RIsk Management, CGTMSE
Field	Business Administration
Published In	Volume 8, Issue 5, September-October 2026
Published On	2026-09-07
DOI	https://doi.org/10.36948/ijfmr.2026.v08i05.87339

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A Study on Credit Appraisal practice for Micro, Small and Medium Enterprises Lending and their Impact on NPA Trends of STATE BANK OF INDIA (2019 -22025)

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