Micro, Small & Medium Enterprises (MSME)

Supercharging the Businesses of Bharat

In line with India's aspiration of becoming an economic superpower, MSMEs have emerged as a driving force, contributing close to 50% of the country's exports, one-third of its GDP, and employing nearly one-fifth of the workforce. This remarkable impact results from Government initiatives and schemes designed specifically for micro, small, and medium enterprises, complemented by entrepreneurship-focussed drives, financial inclusion efforts, and the growing adoption of digital technologies, all of which have created a favourable ecosystem.

We have been actively expanding our product portfolio for the MSME sector, ensuring steady growth and enhancing both the reach and quality of our services. Our offerings have evolved beyond conventional loans, catering to the dynamic needs of our business customers and positioning us to effectively adapt to their changing requirements.

Key Achievements of FY 2022-23

  • We achieved our highest-ever monthly disbursement (in September 2022) for this segment.
  • We implemented a comprehensive strategy revamp for our vertical during the second half of the fiscal year, outlining four distinct business lines: Loan Against Property (LAP), working capital, supply chain finance, and fintech.
  • We established robust systems, people, and processes to meet the technology and compliance requirements of the new business lines.
  • We added regional processing hubs across the country to enhance our regional presence and cater to major markets such as Ahmedabad, Coimbatore, Patna, and Jaipur. Additionally, we launched Asset Centres dedicated to serving MSME customers, with the first centre opening in Mysuru.
  • We implemented various digital enablers, such as enhanced business net banking, QR solutions, and physical propositions like customer relationship management (CMS), to improve customer experiences. These initiatives have made our customer journeys more meaningful and engaging.

Road Ahead

We have devised a strategic roadmap for the next 2-3 years, anticipating sustained growth in our MSME portfolio. Our focus will be on serving semi-formal and formal MSME businesses, offering a combination of short-tenure (ST) facilities for working capital requirements and longer-tenure (LT) Loans Against Property (LAP) to meet their diverse needs. Additionally, our supply chain finance practice and strategic fintech partnerships will drive incremental growth in business metrics. This strategy is driven by technology, as we are investing in the development of new API-ready systems. These systems will simplify critical underwriting, due diligence, and monitoring workflows, reinforcing our commitment to delivering world-class business banking services to our customers. We will leverage key digital enablers that are scalable, ensuring cost leadership in our unit economics.

We anticipate that these efforts will yield positive results in the coming quarters. Our existing portfolio will be strengthened through the addition of quality customers, while the introduction of new lines of business will diversify growth opportunities within the vertical.

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