The State Bank of Hyderabad (SBH) has extended a record Rs 1,065 crore loans to micro, small and medium enterprises (MSMEs) in the second quarter ended September 30.
“We have crossed Rs 900 crore advances to MSMEs in the first quarter of the current fiscal. The total advances in the first two quarters now stand at Rs 1,965 crore,” M. Bhagavantha Rao, Managing Director, SBH, told Business Line here.
Besides declaring the year as the ‘Year of the MSMEs’, SBH had also launched a special campaign, ‘MSME Vijay’ to step up advances. The bank feels that focus on small units would augur well for its business in the backdrop of stagnation in corporate credit offtake and also boost the economy at a time when the manufacturing sector is slowing down.
Most of the borrowers were from auto clusters, small pharma companies and service sector players with investments below Rs 10 lakh.
SAFE LOANS
When asked if there was a threat to the asset quality given the huge quantum of loans, Rao said: “Ìn the overall scenario, the stress on the MSME sector is limited for us at 2.6 per cent of the non-performing assets. We are able to achieve this with a different appraisal policy.”
The officers are being trained to be more efficient at the proposal/appraisal level. “This is the mantra to see whether the venture will be viable and would have the capability to repay. We provide some handholding and consultancy to make their business a success,” he added.
The repayments from seasonal units, such as rice mills and dal units were good in the last two quarters. It will continue to focus on MSME advances in the remaining two quarters of the current fiscal as well.
“MSME portfolio now forms 14.2 per cent of total advances. The aim is to take it to over 18 per cent by the end of year,” the official said. In monetary terms, this would be Rs 18,000 crore.
On corporate loans, he said an immediate pick-up in corporate credit was unlikely in the prevailing economic environment.