Bankers see opportunity in MSMEs – here’s how

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Updated: August 20, 2019 2:26:55 AM

The extent to which banks are using data to lend to SMEs can grow dramatically as almost every bank is working towards this initiative as there is a big opportunity, said the SBI chairman.

Banker, MSME, banking news, industry news, smeImage: Reuters

Bankers see a great opportunity in the MSME sector and are transforming lending procedure by deploying more technology to reduce the disbursement time, a panel having Rajnish Kumar, chairman, SBI; Zarin Daruwala, CEO, Standard Chartered Bank and other eminent bankers said on Monday at FIBAC meet.

The extent to which banks are using data to lend to SMEs can grow dramatically as almost every bank is working towards this initiative as there is a big opportunity, said the SBI chairman.

“The whole lending approach when it come to MSMEs is asset based. I think we should slowly move to cash-flow based lending because it is much more easier than the current method of evaluation,” said Zarin Daruwala.

Read| Banks to sanction retail loans through portal

“We as a bank have an entity called SC Ventures and where we are setting up an SME platform through which they would not only be availing financial services but other services like insurance, logistics, tax and accounting,” she added.

Mahabaleshwara MS, MD and CEO of Karnataka Bank, said: “Technology is driving changes in banking industry, data-based loan sanction is what banks have started to adopt to give credits in minimum time. New generation private banks have already adopted this approach, while, public sector banks are on its way.”

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