A Frequency Assessment of Prevalent Prevention Strategies in order to Manage Banks’ NPAs in MSME Loans

Abstract

The vast amount of non-performing assets (NPAs) is a recurrent problem and a huge barrier to developing a successful banking sector. The MSME sector of the Indian economy is experiencing a worsening problem with delinquent assets. There has hardly been any systematic evaluation of tackling the problem in the context of loans sanctioned to MSMEs. Recent years have seen an increase in bad loans to micro, small, and medium businesses. Curative and preventive measures are both available to control non-performing assets (Meher et al., 2020). The study makes an effort to concentrate on the identification of numerous preventive methods for NPA management in the MSME sector in future. The primary data is related to the actual usage of preventive measures. The data was empirically evaluated using frequency analysis based on a survey of 316 bankers from 10 banks (5 from public and 5 from private sector). Therefore, the current study aims to shed light on the methods utilised to prevent NPAs in MMSEs while taking into account the viewpoint of the bankers who have had direct involvement in lending choices. The findings highlight the key methods for preventing NPAs which the banks must consider while making the necessary structural modifications to their mitigation measures.