Bank loans to midsize industries increased during the six-month period ended September even as credit to most other segments contracted.

Credit to midsize industries increased 13.8% between March and September 2020, according to monthly credit data released by the Reserve Bank of India. Outstanding loans to this segment rose to Rs 1.2 lakh crore on September 25 against Rs 1.05 lakh crore on March 27.

At the end of August, the banking system reported outstanding loans worth Rs 1.07 lakh crore, up 1.7% from March.

“The government’s emergency credit program for small borrowers is certainly contributing to the momentum of midsize businesses,” said Soumya Kanti Ghosh, group chief economic adviser for the State Bank of India. “Credit also goes to small borrowers, but the proportion may not be the same.

In May, the government announced the emergency credit line guarantee system worth Rs 3 lakh crore, aimed at providing emergency credit to micro, small and medium-sized businesses and self-employed workers affected by the Covid-19 pandemic. This is part of the Rs 20 lakh crore economic program announced by the government earlier this year to protect the economy.

On October 8, the government announced that loans worth Rs 1.87 lakh crore had been sanctioned by banks and non-bank financial companies under the program. Of this amount, Rs 1.36 lakh crore had been paid to MSMEs.