HDFC Bank aims to double SME book in four years

Mumbai, June 30: Private sector lender HDFC Bank is targeting to double its SME loan portfolio over the next four years by using digital technology and deepening its network to more non-metros areas.

“Our SME book stood at R70,000 crore as of March 2016 and we are targeting to double our exposure,” head of business banking Aseem Dhru said after the bank launched a complete suite of digital for SMEs. SMEs constitute 18% of the lender's its overall book as of March, Dhru said.

He said the bank, which accounts for 7% of the market share when it comes to financing small businesses, will also grow its market share as it has been growing faster than the market.

A majority of lenders have been facing problems with SMEs on the asset quality front, but Dhru said the bank has not been surprised negatively. HDFC Bank chooses a borrower on the basis of track record and does not have any aversion either sectorally or geography-wise, Dhru said.

The bank registered a loan growth of over 30% for SMEs, which it defines as those having a turnover of up to R200 crore, against 2022% overall credit growth for the bank and high singledigit credit growth for the industry.

At present, the bank has a relationship with 1 lakh of the 3.6 crore SMEs in the country and wants to increase its share by expanding into newer geographies.

The share of non-metro areas has gradually grown to constitute 65% of the customers, Dhru said, adding that this will definitely grow.

The bank has launched a digital offering for SMEs through which the small businesses will be able to do all its banking transactions online. Dhru said in the next 12 months, HDFC Bank is targeting to do 60% of the banking transactions on the receipts, payments and forex fronts to be done using the digital alternative. PTI