BoB eyes 5% growth in MSME loan portfolio for FY22


Dhrubashish Bhattacharya, Managing Director (MSMEs), Bank of Baroda, Dhrubashish Bhattacharya, Managing Director (MSMEs), Bank of Baroda, added that in FY21 the growth of the MSME portfolio was mainly due to the ECLGS, where the Bank did around Rs 8,000 crore in business in the ECLGS alone. This year we’re not getting that leverage

The public lender, Bank of Baroda (BoB) plans to achieve 5% growth in its MSME loan portfolio for the past financial year compared to the previous financial year. At present, the bank’s MSME portfolio stands at around Rs 1,00,000 crore.

Speaking exclusively to Bizz Buzz, Dhrubashish Bhattacharya, Managing Director (MSME), Bank of Baroda said, “In MSME, we have a pound of around one lakh crore in FY21. In FY22, we are targeting approximately five percent growth in this segment over the prior year.

When asked if he was happy with this relatively low growth, he replied, “So if you look at the current situation, it’s just not about growing the book. What’s important, is that you have to maintain the health of the portfolio.”

Moreover, there are two types of companies. One is the organic business. And one is the business that comes under government schemes. So this time the business that we have done organically is purely non-governmental business – the core business so to speak. So growth there will be higher, he said.

Talking about the remarkable growth witnessed by the bank under the portfolio over the past fiscal year, Bhattacharya added that in fiscal year 21, the growth in the MSME book was mainly due to ECLGS, where the Bank did about Rs 8,000 crore in business in the ECLGS alone. This year, we are not getting that leverage.

“In terms of NPAs, we expect our NPAs in MSMEs to decline in the coming years,” he said. Bringing down the NPA is a function of sourcing and building a quality book as well as effective collections.

BoB and PAISALO recently entered into a co-loan agreement to provide MSMEs and women entrepreneurs with small income-generating loans.

Commenting on this, he said that PAISALO Digital is essentially a microfinance company. They are present across India and largely provide micro-loans under the Joint Liability Group (JLG), mainly to female entrepreneurs. Currently, PAISALO digital is in expansion mode. It is an AA rated company.

He said, “We wanted to partner with PAISALO Digital to leverage their expertise and experience in originating micro-loans using an end-to-end digital platform for sourcing, servicing and the recovery of the priority sector of low-cost income generation loans.”

Under the bank’s co-loan agreement, the financing granted is essentially a commercial loan; an income-generating loan provided to the unserved and underserved segments of the country – micro, small and medium enterprises (MSMEs) and women entrepreneurs. PAISALO has a deep presence and understanding of the product and the loan will be processed and disbursed 100% digitally without any manual intervention.


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