BoI: loans to professions & self employed increasing
LOAN OUTSTANDING TO PSES
The professionals & self-employed (PSEs) financed by BoI includes doctors, engineers, architects, teachers, contractors, small businessmen, skilled manpower like electrician, carpenter, plumber etc. Mohapatra states: “Total number of loans extended to such customers in Q1, 201718 is 4947, amounting `143.68 cr.” Loan outstanding to PSEs has increased more than two and half fold in last just 2 years and a quarter. Mohapatra adds: “Loan outstanding to PSEs has increased from `2073.03 cr in 2015-16 to `2512.77 cr in 2016-17.”
LARGEST CREDIT CLASS
Self-employed engaged in small business/ traders has been given the highest credit in Q1 for FY 2017-18.
Mohapatra states: “Approximately 1400 accounts fall under this category, amounting `44 cr.”
BoI is offering 0.50-1.00% discount to female professionals over applicable rate of interest. The ROI ranges from 1 year MCLR to 2.5% over 1 year MCLR depending upon the scheme and rating of the borrower. BoI has recently launched products like - star doctor plus, star contractor line of credit etc for financing to PSEs.
Bank has various monitoring tools and techniques by which it contains slippages. In NPA accounts, it tries to revive the account through rectification/restructuring. The default rate in repayment of loans to PSE is decreasing. Mohapatra reveals: “Number of PSE accounts that slipped in NPA came down from 4825 (`119.10 cr) as of 2016-17 to 2996 (`47.80 cr) in Q1 2017-18.”
BoI has made PSE loan applications online and the same could be accessed through website of the bank. It has dedicated processing cells in various zones through which the loans are processed to make it less cumbersome for the borrower.
MEDIUM TERM OUTLOOK
The demand of loans to PSEs will be more in metro and tier 1 cities compared to other centers. Mohapatra estimates: “Presently loan to PSEs are around 5% of the total MSME portfolio of the bank. We wish to increase the same to approximately 8% over the period of 2-3 years down the line.”