City-based Indian Bank has said it expects around 30-35 per cent growth in lending to small and medium enterprises (SMEs) during the current year. Last year, the bank registered a growth of around 34 per cent and expects to continue at the same pace in the current fiscal.
Indian Bank chairman and managing director TM Bhasin told Business Standard that the as against the target of Rs 5,902 crore in 2009-10, the bank achieved Rs 6,428.79 crore as on March 31, 2010.
The approved incremental target for the MSME portfolio is Rs 2,220 crore in 2010-11, of which Rs 1,500 crore is earmarked for small enterprises and Rs 720 crore for medium enterprises.
The projection is 20 per cent growth in the first quarter, 25 per cent in the second and third quarters and the remaining 30 per cent growth during the fourth quarter, he said.
In 2006-07, the growth was 23 per cent, in 2007-08 it was 39 per cent, in 2008-09 it was 26 per cent and 33 per cent in 2009-10. he noted, as against the minimum growth of 20 per cent stipulated by the government, said Bhasin.
He noted that during the year ended March 31, 2007, disbursements to the sector were Rs 2,311.99 crore, which rose to Rs 3,256.31 crore in 2007-08 and to Rs 3,950.26 crore and to Rs 6,428.79 crore in 2008-09 and 2009-10 respectively.
As on March 31, 2010, total SME accounts with the bank was 1,79,238 compared to 83,800 a year ago, an increase of around 113 per cent.
The bank has opened 62 dedicated branches and nine central processing units (CPUs) to cater to these accounts. “As part of our expansion, we will increase the number of dedicated branches to 100 and CPUs to 12”.
To augment MSME exposure, development studies as well as cluster approach are being utilised. Indirect finance to MSMEs by financing industrial parks and other infrastructure set-up linked to MSME clusters, said Bhasin.
The bank has adopted informal self-help group concept by which there will be a cross guarantee, said Bhasin. The bank would clear a proposal in 21 days, while the industry average is around four weeks for these segments. The bank initiated the necessary measures to the recent RBI's guidelines including learning of the SME data in CBS and sensitising the field functionaries in this respect, said Bhasin.
