With a view to meet the credit requirement of the Small and Medium Enterprises (SMEs) and enable them to face the adverse impact of economic slowdown, the public sector, Bank of Baroda today opened a ‘SME loan factory’ in Bhubaneswar.
This is the 33rd such centre opened by the bank in the country and the first one in the state. It will provide customised products and services to the SME customers through simplified processes in the minimum possible time.
“To focus on SME lending we have opened 33 ‘SME loan factories’ in the country and intend to add 2 more such centres at Chandigarh and Vijaywada by the end of the current fiscal”, S P Agarwal, general manager (SME and wealth management), BoB said.
Talking to the media after inaugurating the new SME loan factory in Bhubaneswar, Agarwal said, the bank has an exposure of Rs 14,000 crore in the SME loan segment at present and intends to achieve an exposure of Rs 15,000 crore by the end March 2009.
Stating that the bank has already doubled the SME credit within a period of 3 years from 2005-06 to 2007-08, he said, SME credit increased from Rs 5600 crore in 2005-06 to Rs 11,800 crore in 2007-08.
Agarwal said, the bank has an exposure of Rs 220crore in the SME loan segment in Orissa and has already sanctioned Rs 51 crore loan to the SMEs in the current fiscal. It targets to lend Rs 100 crore to this sector through the new SME loan factory during the first 3 months of operations.
Outlining steps taken by the banks to help the SMEs tide over the adverse impact of the economic slowdown, Agarwal said, the bank is extending loans up to Rs 1 crore to the micro, small and medium enterprises (MSMEs) without collateral or the third party guarantee. Interest concessions are being provided to the micro and small entrepreneurs and the repayment period for the units have been extended to 180 days, in case of delay in getting the receivables.
Besides, in case of default, the accounts of the small units are being restructured. The bank has so far restructured more than 5000 SME accounts across the country which includes 24 accounts in Orissa.
Further, to impart training and provide industry mentorship to the young entrepreneurs, the bank has entered into a memorandum of understanding (MoU) with the Bharatiya Yuva Trust. While the training has started in Pune, it is likely to be extended to Gurgaon soon. The bank may set up a Baroda Swarojagar Sansthan (BSS) in Bhubaneswar to train unemployed youth, he indicated.
The bank having 46 branches in the state has achieved a total business of Rs 2200 crore in Orissa so far and hopes to close the current fiscal with a business of Rs 2300 crore. Manoranjan Bhuyan, AGM of the bank was present.
