State Bank of Hyderabad (SBH) has disbursed a record Rs 900 crore loans to the micro, small and medium enterprises (MSMEs) in the first quarter of the current financial year ended June 30, 2013.
“We have already declared 2013-14 as ‘MSME year’ to tap the business potential and it has been paying off,” M. Bhagavantha Rao, Managing Director, SBH, told Business Line .
In the corresponding quarter of last financial year, its advances to MSMEs were only Rs 40 crore. Lack of demand for corporate loans and increasing concerns about defaults made the bank step up focus on the MSME and agricultural portfolios.
The total outstanding portfolio now stood at Rs 10,666 crore as on June 30 this year, accounting for 12.2 per cent of bank’s total advances.
For the full-year, a disbursal target of Rs 6,000 crore was set earlier. “But now, we are thinking of revising it to Rs 9,000 crore,” the bank chief said.
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SBH has put in place a diversified strategy to achieve this goal. “We began by better equipping ourselves internally. Staff were trained specially and steps were taken to ensure that they were in the MSME segment at least for a year after training,” Rao said. Apart from online applications, SBH has been working together with various chambers of commerce across regions.
“The response from traditional MSMEs engaged in businesses such as rice, dal, and cotton/textiles has been overwhelming,” he said.
Branch-staff have also been asked to tap their immediate neighbourhood for new customers.
On the level of non-performing assets in the MSME sector, Rao said they were under control. “Roughly, there form about 2.5 per cent of total assets. In the current economic environment, this is not alarming,” he said.
SBH is also ramping up its focus on agricultural lending, apart from retail. “There has been no pick-up in corporate credit. In retail, car loans have registered slow growth while home loans are doing well,” the official said.