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SBI projects MSME loans to drive growth in the next 5 years



SBI says MSME loans will be focal point for growth over next 5 yrs

In a recent announcement, State Bank of India (SBI) revealed that small business lending will be the focal point for growth and profit over the next five years. The state-owned lender introduced a new product called “SME Digital Business Loans”, which promises loan approvals in just 45 minutes. The bank aims to expand credit accessibility for small businesses through various touchpoints and QR codes, streamlining the lending process.

For the fiscal year ending on March 31, 2024, SBI reported a significant growth of over 20% in its overall SME book, reaching ₹4.33 lakh crore. The gross non-performing assets in the book also decreased to 3.75% from 9.43% in FY20. The newly launched digital loan product is seen as a game-changer in the digitalization of SME lending, offering a swift end-to-end sanction process within 45 minutes.

SBI Chairman Dinesh Khara emphasized the bank’s focus on leveraging data from MSME units to provide a fast and intuitive lending process. The new platform eliminates traditional credit underwriting and appraisal processes, relying instead on data sources like ITR, GST returns, and bank statements. SBI has developed a data-driven credit assessment engine capable of making sanction decisions within 10 seconds of receiving the necessary information.

For loans up to ₹50 lakh, SBI has waived the need for financial statements, relying on transaction history and GST returns for evaluation. The bank’s managing director for retail banking and operations, Vinay Tonse, highlighted the unique proposition offered to both new and existing MSME relationships, ensuring a quick sanction process within 45 minutes. The launch of “SME Digital Business Loans” signifies SBI’s commitment to simplifying and speeding up the lending process for small and medium enterprises.

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