The State Bank of India (SBI) plans to revamp its business model and increase its market share in loans to micro, small and medium enterprises (MSMEs) to 20 per cent by March 2024, a little over 15 per cent now.
State Bank of India Deputy Managing Director (Retail Business) Saloni Narayanan told Business Standard that the bank’s market share has increased to 23 per cent in deposits and 20 per cent in advance. But what is worrying is that the market share in the SME book is declining. Actually it has come down from 20 percent of 5 years ago.
However, the financial year 2020-21 was better for this segment for several reasons, including Guaranteed Emergency Credit Line (GECL). Narayanan said the SME loan book was estimated to have grown by Rs 24,000 crore and the market share crossed 15 per cent.
Narayanan said that given the huge potential in this sector, the bank is formulating a strategy focused on this sector. This will involve redesigning the operational model by consulting advisors and implementing new strategies to achieve growth in the MSME sector and ensure that asset quality remains intact.
Around 2,300 corporate houses employ SBI and there is a huge scope for vendor and retailer financing and cluster financing, where the bank also needs to increase its presence.
SBI has assessed its flaws at which level the problems are occurring. Narayan said, “We want to be a bank selected for SMEs.”
SBI has a network of over 1,100 branches nationwide, SME-centric and specializing for MSMEs, which are operated through approximately 1,770 trained relationship managers.
Last year, the bank appointed Assistant General Managers (81 in total) for each zone, so as to maintain better relations with SME customers. It is now easier to do business, especially in the SME banking space. Also, the bank has a lot of data and is the largest lender of government-backed schemes. For this reason, SMEs are considering doing business in a focused manner.