HDFC Bank to hire 500 more employees this fiscal to expand MSME coverage

Country's largest private sector lender HDFC Bank, which has a focus on the MSME sector, is hiring 500 more relationship managers this fiscal as the bank is expanding its coverage to 575 districts, a senior banker has said.

The headcount addition will take the Micro, Small and Medium Enterprises (MSME) vertical strength to 2,500. As of June end, its employee strength stood around 1.23 lakh.

The bank's MSME vertical covers 545 districts now with dedicated relationship managers and supervisors, which will be expanded to 575 districts or more by the end of this fiscal.

"As we are expanding our MSME footprint to 575 districts from 545 now, we are hiring over 500 more to the 2,000-strong headcount at the MSME vertical this fiscal year. This should take the overall headcount at the vertical to a little over 2,500," Sumant Rampal, senior executive vice-president for business banking & healthcare finance, told PTI on Monday.

After reclassification and the resultant tagging of wholesaler and retailer loans under the MSME book, the bank closed the MSME book at Rs 2,01,833 crore in March 2021 quarter, marginally up from Rs 2,01,758 crore in December 2020, when it grew by over 30 per cent.

The government recently asked MSMEs to be re/de-classify themselves based on their turnover and get a Udhyam registration certificate.

The bank's MSME portfolio is spread across sectors like textiles, fabrication, agri-processing, chemicals, consumer goods, hotels & restaurants, auto components, pharma and paper industry, and also include the entire selling chain ranging from wholesalers, retailers, distributors, stockists and supermarkets, Rampal said.

Rampal said the bank has been increasing its focus on the sector since the past two years, and the same only increased since the pandemic when the government opened a slew of measures to help small businesses tide over the crisis with the emergency credit line guarantee scheme (ECLGS) being the biggest booster helping it disburse 30 per cent more loans by December 2020, to Rs 2,01,758 crore.

Rampal said his team has already identified the districts for expansion. Though the bank has regular branches in these identified districts, MSME lending needs special focus based on their unique needs, he said.

He said of the over 5,500 branches, a little over 1,800 of them have more than 25 per cent of their loans coming in MSME accounts and 4,800 of them service this segment of customers.

Geographically speaking, the bank is present in 630 districts of which 545 districts now have special MSME counters.

Giving a break-up of the hiring, he said, of the total 500 planned additions, half will be for the small & medium sub-vertical, which already is a 975-strong team.

Though the RBI last Friday said there was nothing alarming about rise in MSME bad loans, a SIDBI-CIBIL report in late July said, the NPA levels among MSME borrowers surged to 12.6 per cent in the March 2021 quarter, up from 12 per cent in December 2020, while loans to them have jumped to Rs 9.5 lakh crore in FY21 from Rs 6.8 lakh crore in FY20.