SBI doubles down on lending to small businesses in hinterland; launches vertical to offer micro credit

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Published: June 2, 2020 8:25 PM

Credit and Finance for MSMEs: Around 8,000 SBI branches in the targeted areas have been selected to offer micro-ticket loans to small businesses and farmers.

The new vertical will be headed by the Deputy Managing Director Sanjeev Nautiyal.

Credit and Finance for MSMEs: India’s largest lender State Bank of India on Tuesday announced creating a separate vertical for lending to micro, small business, agriculture and allied activities. The new vertical — Financial Inclusion & Micro Market (FI&MM), as the name suggested, will focus on financial Inclusion in rural and semi-urban regions, SBI said in a statement. For this, around 8,000 SBI branches in the targeted areas have been selected to offer micro-ticket loans to small businesses and farmers along with improving “service quality and availability of banking services through the bank’s vast network of over 63000 customer service points in rural, semi-urban, urban & metro areas.”

SBI said that the new vertical, to be headed by the Deputy Managing Director Sanjeev Nautiyal, will give a boost to the micro-finance sector. As part of the financial inclusion of people living in India’s hinterland, “FI&MM Vertical will provide an opportunity to serve the small business, agri & allied segment so that they can run their businesses smoothly, especially in the current times of uncertainty,” said Rajnish Kumar, Chairman, SBI.

Also read: Identity change: Covid-hit startups look to become MSMEs to benefit from govt’s mega relief package

FI&MM will operate with a four-tiered structure under the Chief General Manager, General Manager, RMs at Regional Business Offices and District Sales Hub (DSH) to ensure quick turnaround time for sanctions and disbursement of loans. “The primary emphasis will be on consolidating the district level presence which will provide constant sales & recovery support to branches in the FI&MM Network,” the bank said.

As part of the relief offered to small business customers impacted by Covid, SBI had provided 10 per cent of fund-based working capital limits by way of Common Covid-19 Emergency Credit Line to ease working capital finance along with a moratorium on term loans and working capital.

The development comes weeks after the government had announced multiple relief measures for Covid-hit small business to recover. Rs 3 lakh crore collateral-free loans, Rs 20,000-crore subordinate debt for NPA MSME accounts, Rs 10,000 crore Fund of Funds to encourage MSMEs to list on stock exchanges and more.

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