 "Dena Bank eyes healthcare biz to boost retail book")
Ashwani Kumar chairman and managing director, Dena Bank said, “we are focusing on financing to doctors. Health is an area of growth. There are costly equipments which doctors use.”
He added, “Chances of default in this sector are very low and it can be built in a profitable way.”
At the times when corporate funding pipelines are very negligible the banks are excessively focusing on retail credit. The banks are going after home loans and auto loans with attractive rate of interest. Most public sector banks are giving home loans on base rate and have brought down the spread on auto loans.
According to Ashwani Kumar, doctors occupy a respectable position in the society so there are hardly any chances of defaults and with the continuous growth in this sector there is a good business opportunity in this product within retail financing.
Currently the bank charges an interest rate of 12.85 per cent on such loans.
The current limit of the loan is Rs 2 crore. Of which 10 per cent can be sanctioned as working capital and rest being the term loan. Repayment period is between 5-7 years.
Several specialist doctors including radiologists, pathologists, dentists, ophthalmologists and specialist surgeons use equipments whose costs range from few lakhs to some crore rupees. Radiologists use the costliest equipments of all.
According to apex body of doctors Medical Council of India’s annual report for 2010-11, the latest available on its website there are 239 medical colleges in the country and about 35,500 doctors pass out from these colleges every year. Total number of doctors in the country is about 850,000.
This data however excludes dentists. Dental council of India is the regulatory body of dentists in the country.
According to an executive with multinational medical equipment manufacturing company market for the medical equipment market in the country at the end of 2011 was $2.2 billion and is expected to touch $4.6 billion by December 2016.