Micro, Small and Medium Enterprises (MSMEs) must ride on the Digital India movement and adopt in a big way the digital channels offered by banks and financial institutions, Amitabh Chaudhry, Managing Director and CEO, of Axis Bank said on Friday.

Addressing the 10th edition of India SME 100 Awards in the capital, Chaudhry highlighted that Axis Bank has enhanced its digital lending channels to facilitate quicker turnaround time for sanction and disbursement of loans to MSMEs.

“Today, most financial transactions can be done digitally right from application for a loan to payment of salaries, bill discounting, making forex transactions and more”, Chaudhry said.

He also highlighted that Axis Bank, which has an MSME loan book of over ₹2 lakh crore, has taken several initiatives to offer services beyond banking to its MSME customers in order to help them thrive in this dynamic environment.

‘Dil Se Open’

Currently, Axis Bank has close to 200 dedicated centres in small and medium enterprise groups catering to MSMEs and a network of 5,000 plus branches. It also has 500 plus branches under the platinum branch concept for Small Business Banking (SBB) that provides various finance and banking service assistance.

“We intend to use our network extensively to continuously reach out to our customers and prospects and live up to our credo of being ‘Dil Se Open’, Chaudhry added.

Noting that today liquidity for the MSME is of supreme importance, Chaudhry said that Axis Bank has moved from traditional underwriting to new aged credit assessment techniques such as cash flow-based lending where the bank offers collateral-free EMI-based Business Loans up to a certain amount for the MSMEs.

“Our digital invoice discounting platform ‘Invoice Mart’ has set a new benchmark by facilitating the financing of MSME invoices of more than ₹64,500 crore”, he added.

Key Focus

Indian MSMEs—which are the power engines of the economy —are increasingly focusing on improved production methods, penetrative marketing strategies and modern scientific management capabilities to sustain and strengthen their operations. They also have the potential to absorb the latest technologies from diverse fields. The ‘Indian MSME sector’ is a role model for other several other countries, Chaudhry added.

The MSME network in India is vast and covers around 630 lakh units manufacturing 8000+ products contributing about 45 per cent to manufacturing output and about 44 per cent to direct and indirect exports. The MSME sector is reportedly the second-largest employer in the country after agriculture.

Chaudhry highlighted that the MSME sector is seen as one of the most important drivers for India to achieve its target of a $5 trillion economy by 2027. 

‘Multi-fold growth’

The ‘Make in India’ theme revolves around import substitution through strategic manufacturing by MSMEs. Additionally, MSMEs are not limited to a few sectors anymore but are spread across sectors like pharma, auto components, food processing, technology etc, some of which have seen multi-fold growth in recent years.

During the year, Axis Bank has focused on augmenting small ticket size loans, crop loans to small and marginal farmers and microfinance business loans for women borrowers from low-income households, he said.

Axis Bank has created a distinctive ‘Bharat Bank’ unit with tailored rural products, an increased footprint through branches and digital presence, partnerships with facilitators like CSCs and VLEs enabled by multiple agri-commodities-focused ecosystems, he added.

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