The SBI to Revamp MSME Lending Ops to increase efficiency, according to the latest press conference of the SBI. With improvement in certain factors like processes, structure, and operations, the increment of efficiency is achievable in the SME space. it is very important to register Micro, Small, and Medium Enterprises (MSMEs). And, we provide the services for MSME Registration, in case you’ve registered yourself yet.
How will SBI Achieve Optimum Quality for their Assets?
The SBI will not only revamp their lending ops but will revamp their entire operational setup for lending to MSMEs. They will be doing this intending to improve the turn-around-time (TAT). As well as customer experience with the evaluation of non-performing liabilities.
However, to seek the bids from the consultants, the bank has earlier floated a Request-for-Proposal (RFP) to carry out the entire process. And, to increase its market share, SBI released the tender document on March 26, 2021.
What’s Inside the Tender Document?
According to the tender document, which was created on 26 March 2021, they aim to increase the market share which currently stands at 15% only. However, to become the banker of choice for MSME is another objective for them. And, to do that, SBI has shown its intention to improve the existing processes and structure in the SME space.
However, the released document also reveals the unwanted/undesired gaps in the existing process and flows of the bank.
SBI will have to develop some analytics tools with the capability to generate supply chain financing business from its existing Current Account (CA) base as SBI to Revamp MSME Lending Ops.
How much SBI is Confident about this Revamp?
To ensure success from this revamp, SBI will have to improve the four verticals in MSMEs lending operations:
SME Centre & Relationship Managers (RM)
At SME Centre, they need to identify gaps in the end-to-end process of loan origination, sanction, monitoring, and change proposals. While, with relationship managers, the bank can identify areas of data obtention and many others.
Supply Chain Finance
With the help of this vertical, SBI wishes to set a benchmark on current vendors/dealers financing SCF journeys.
With improvement in the CGTMSE, the SBI can easily defy those deficiencies and poor offtake that has been hurting asset quality.
With Cluster Financing, SBI aimed to build in the risk mitigants. With this building, the bank wants its consultants to coordinate with various government agencies to increase the cluster portfolio value.
What Does Figure Say?
With the support of more than 1770 strong team of RMs, SBI can easily revamp MSME lending ops by providing specialised services to MSMEs as per the requirement
Well, as per December 2020 stats, SBI’s SME portfolio grew by 5.6% Year-on-Year (Y-O-Y) to INR 2.94 Lakh Crore.
However, the NPA ratio was recorded at 6.85% in the SME segment amid an interim judicial order. The judicial order says that not to recognise NPAs after 31st August 2020.
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