State Bank of India (SBI) has been playing a vital role in the development of small scale industries since 1956.The Bank has financed over 8 lakh SSI units in the country. It has 55 specialised SSI branches, 99 branches in industrial estates and more than 400 branches with SIB divisions. The Bank finances for small business activities which are of special significance to a large number of people as many of these activities can be started with relatively lower investment and with no special skills on the part of the enterpreneurs. In an interview with MK Nag, chief general manager, SME Business Unit, SBI, he shares SBI?s plans and the target of growth that he has set for the current year with FE?s Kumud Das.

What are your current year plans for the SME sector?

For the current year we plan to focus on cluster financing, both industrial and artisan. We also want to strengthen relationship building both with the medium enterprises as well as small enterprises. We are, therefore, launching some new concepts as well as revamping some of our systems related to processing and sanction of loan at our SMECC or credit processing cells. Ultimately we would want greater customer satisfaction and in return would like to increase customer acquisition.

What kind of target you have for financial disbursement for the SME sector? Which are the sectors?

Roughly we have targeted a growth of 25% over the last year levels. We do not wish to limit our exposure to any sector but focus areas would again be manufacturing clusters, promoting our dealer funding on the electronic platform by tying up with more industry majors and bringing their dealers on board. Smaller accounts less than Rs 1 crore would also be targeted under any segment.

How do see raising interest rates affecting the sector?

Interest rates would have to be in sync with the state of the economy and other environmental factors. Within the overall framework, we would try to see what is the best package we can offer to our SME clients.

What kind of SME loans you have restructured? What are the segments?

SME restructuring is not limited to any segments. In the current year we are gearing up to provide restructuring to SME?s where required. We are planning special training programmes for concerned officials to enable them to build expertise.

Exim Bank has suggested cluster-based production and funding? What is your role in that?

SBI has already undertaken studies of various clusters in a very comprehensive manner, whether the cluster is export based or not. The studies also cover technical requirements for improving production for the cluster. We have a consultancy cell which looks into techno-economic viability of an industry or project.

How many specialised SME branches do you have? Are you trying to expand them?

We have over 500 SME specialised branches. However, SME business is being handled by almost all our 13000 odd Branches.

What is the present NPA in the sector? Do you think it will deteriorate further?

Even though the NPA is under manageable limits, we need to be watchful of the rising rate scenario and the state of economy.