The lender’s executive director of DBS Bank India, Sudarshan Chari, stated that the bank is looking to increase its small and medium enterprises (SME) mix of the loan portfolio in the next five years from 10% to 30%.
He claimed that SMEs as a focus area are pillars of growth—the wholly-owned subsidiary set up benefits greatly from the development of SMEs.
In the next three to four years, the goal of the bank is to have a compound annual growth rate of its SME book of over 35%.
Products launched by the bank to reach this goal are bank statement-based digital loans, alternate lending through loans, and GST-based SME loans.
The bank is utilizing its branches, partnerships, and relationship managers to increase its customer base, on the liability front. 300 branches out of the 530 branches spread out actress 350 locations are located in SME hubs and clusters.
Chari said the bank has access to markets, product offerings, and strategies they have set in place over the past four years. He says that the bank has done the groundwork for digital loans through partnerships. He also said that networking and partner support can help the bank’s liability and asset strategy.
Chari believes that what makes the Singapore-based bank different from other banks is “Asia connectivity’’ and the hunger for growth.
However, a key monitorable is the impact of higher interest rates on small and medium enterprises.
He claims that after covid, the impact of a spike in interest rates on SMEs is greater than ever since the cost of borrowing has gone up.
Chari also said that a short-term impact on profitability will happen due to the lag in price transfer managed by SMEs. He claims that in the long run, all SMEs will recover and there is no challenge to their performance.
Social enterprises and SMEs developing innovation-based solutions to solve social and environmental issues can assess grants of up to 250,000 Singapore dollars or Rs. 1.5 crore through DBS bank.
Chari claims that according to a survey by the bank, SMEs are practicing sustainably due to awareness, and their only challenge is financial investments. Technical and financial help can do SMEs a lot of good.
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