The Hindu Business Line : HSBC plans to step up SME biz

The bank, which has roughly 30,000 customers in the small- and medium-sized segments, may consider scaling up its key product , depending on the opportunities emerging in the market.

HSBC now allows an SME client to source up to Rs 35 lakh – an overdraft facility that may be whittled down to an amount as low as Rs 2 lakh subject to the client’s requirement.

HSBC, said Mr Bhuvnesh Khanna, Head Small and Medium Enterprises, Commercial Banking, is closely observing the current trends in the SME segment, especially those related to the growth recorded by these businesses.

Research findings

What props up HSBC’s confidence is the special position enjoyed by SMEs in the country’s economy, Mr Khanna said, while referring to research findings. Over 70 per cent of the country’s SMEs have grown well in recent times, many of them evolving into bigger players in the process.

“A section of the players have scaled up remarkably, often assuming larger roles as suppliers and even catering to large manufacturers companies. Many in this group have been able to tap global opportunities too,” he said.

The bank, which holds trade-related services as a focus area, has seen considerable business opportunities arising from sectors such as chemicals, leather, textiles and auto/auto ancillaries. At the moment, about 5 per cent of the country’s exports is processed through HSBC’s operations.

As HSBC sees it, private equity investments will continue to flow into the SME market even as individual players expand their businesses. With this serving as the background, it has recently started providing transaction banking services to SME clients. Its factoring and foreign exchange services are already gaining significance in this space, it is claimed.