State Bank of Mysore has adopted a cluster-based approach to finance the micro, small and medium enterprises (MSME) sector.

The bank has been active in its lead bank areas in the country and has been assisting growth of units in the cluster.

“We have our branches in all the 38 identified clusters recognised by United Nations Industrial Development Organisation and the Union Ministry of MSME,” said Dr K Lakshmisha, General Manager-MSME, State Bank of Mysore.

Various measures have also been taken up by us to provide assistance as a partner in the growth and success of MSMEs, he added.

SBM in the financial year 2011-12 has made advances to micro and small enterprises to the tune of Rs 3,353.68 crore.

Besides this financing, the public sector bank has also set up six specialised SME branches in Karnataka.

In all, the bank has about nine credit processing cells across the country including five in Karnataka, to expedite sanction of the loans for SMEs.

“We are in the process of opening more specialised SME branches this fiscal,” Dr Lakshmisha said.

Facility for on-line application is also being provided on the bank’s Web site, which the MSE constituents can take advantage of.

Not to lag behind, SBM has taken competitive interest rates route to fund SMEs.

Dr Lakshmisha said “Through this we have contributed to reducing the cost of credit.”

Collateral requirement is another area where it has taken a lead over other banks. For loans up to Rs 10 lakh it is mandatory that the bank should not insist on any collateral.

But SBM has extended this further and made it mandatory for all MSE advances up to Rs 1 crore.

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