Axis Bank, private sector lender is going to concentrate on lending to small industries despite concerns over asset quality coupled with doubtful macroeconomic situation. The bank is expecting to grow 25% each over the next two years in the SME loans.
Presently, SME composed 15% of the bank's overall loan book, which stood at Rs 1.40 lakh crore as on September 30. The RBI’s 13 rate hikes since March 2010, has affected the asset quality in SMEs and further slowdown in global growth has also led to question marks over companies dependent on exports.
In the SME sector commercial realty, export-led companies and textiles are the spaces, about which the bank will be cautious about but engineering, infrastructure and pharmaceuticals are doing well. SME segment as those having a turnover of less than Rs 150 crore and the SME portfolio contributes to 35% of the bank's overall priority sector lending requirements as classified by the RBI.
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