Hyderabad, Sept 8
IN tune with the Small and Medium Enterprises (SMEs) focus announced by the Union Finance Minister in his Budget speech, Andhra Bank and SIDBI (Small Industries Development Bank of India) have entered into an agreement to co-finance SMEs, service sector and development of infrastructure.
The combine would focus on SME clusters at Hyderabad, Chittoor, Vijayawada and Rayadurg. These clusters covered fans, electronic goods, pharmaceuticals, bulk drugs and hand tools and foundry.
Though the focus was on SMEs in these clusters, projects in other sectors would not be refused.
"This will be extended gradually to other clusters seeing response and scope," Mr K. Ramakrishnan, Chairman and Managing Director of Andhra Bank, said.
The focus would be to make available timely and adequate credit to SME units, including tiny units.
Addressing a gathering after signing the pact, he said the bank's advances to the SME sector at the end of June were Rs 1,863 crore. "We target to achieve Rs 2,127 crore by the end of March 31, 2006," he said.
The bank, however, looked at Rs 2,520 crore. "We are sure we will achieve this," he said.
The bank would convert all of its 13 SSI branches into specialised SME branches. "We are seeking RBI approval in this regard," he said.
Besides, the bank identified three more branches (Autonagar branch in Vijayawada, Balanagar branch in Hyderabad and Anuparapalayam branch in Chennai) for focussed lending to SMEs in fan, pharma, auto and hosiery clusters.
Mr N. Balasubramanian, Chairman and Managing Director of SIDBI, wanted the credit available through co-financing should be made available at 9.5 per cent for term loans.
He asked Andhra Bank to tell prospective entrepreneurs with viable projects about the Rs 500-crore SME Growth Fund set by the SIDBI.