HDFC Bank’s MSME book grew 30 per cent year-on-year to cross the ₹2-lakh-crore-mark as of December-end, mainly boosted by the pandemic-induced ECLG scheme under which it disbursed over ₹23,000 crore.
The growth is also driven by a renewed push towards customers in semi-urban and rural areas, the bank said.
In December 2019, the bank’s MSME book stood at ₹1.4-lakh crore. This grew by over 60,000 crore, or 30 per cent, to ₹2,01,758 crore by the December 2020 quarter, giving it a 10.6 per cent share system-wide MSME lending, becoming the second-largest lender in this segment after State Bank of India, the bank added.
“Our MSME lending is back to pre-pandemic levels, with loan book growing at 30 per cent year-on to ₹2,01,758 crore as of December 2020 quarter,” said Sumant Rampal, Senior Executive Vice-President, Business Banking and Healthcare Finance.
“While the ECLG scheme was the biggest driver, boosting the loan book by ₹23,000 crore disbursed to around 1,10,000 MSME customers, our own renewed push towards customers in semi-urban and rural areas also helped us during the pandemic, leading to an incremental loan growth of over ₹60,000 crore,” he said, adding most of the ECLG disbursals took place only in the past three to four months.
At 30 per cent loan growth, the MSME book is the fastest-growing vertical for the bank.
“This is a testimony to our commitment to strengthen the MSME sector that accounts for about 30 per cent of GDP and the largest employer,” said Rampal.
ECLGS scheme
The government launched the third version of the ₹3-lakh crore emergency credit line guarantee scheme (ECLGS) last November for MSMEs, following the KV Kamath committee report.
On Thursday, Union MSME Minister Nitin Gadkari told Lok Sabha that banks and other financial institutions have cumulatively sanctioned ₹2.46-lakh crore of the ₹3-lakh crore scheme, while disbursal stood at a low ₹1.81-lakh crore as of February 28, according to the data from the National Credit Guarantee Trustee Company, which is the implementing agency of the ECLGS.
The scheme comes with a 2 per cent interest subvention and is of five-year tenor, of which, the first year gets a payment moratorium.