New Delhi: Indian state-run lender Vijaya Bank expects its lending to micro, small and medium enterprises (MSME) sector to exceed Rs 90 billion in the current financial year 2011-12 ending March 31, Chairman and Managing Director H S Upendra Kamath said.
Vijaya Bank has provided around Rs 74.81 billion towards financing to the micro, small and medium enterprises sector in nine months to December 31, 2011, Kamath told reporters Friday on the sidelines of an event.
The bank has fixed a target of Rs 91.06 billion in small and medium businesses financing for the current fiscal year, Kamath said, adding that he expects the bank to achieve the MSME financing target through its 35 specialised small, medium enterprise branches.
The micro, small and medium enterprises industry has been facing challenges in receiving funds from lenders and alternate sources of capital like private equity, venture capital and angel funds. Notably, a Crisil study on the funding patterns of 2,000 SMEs in India had showed that there is scope for banks to increase their lending to the sector by Rs 500 billion.
Vijaya Bank has also launched MSME credit-processing centres -- business entities with separate administrative establishment -- in the cities of Bangalore, Chennai, Hyderabad, Mumbai, Delhi, Ahmedabad and Pune.
The MSME credit processing centres will aid the bank and entrepreneurs by accelerating the process of disposing proposals, Kamath added.
Earlier, this month, Vijaya Bank had given its preliminary approval to sanction loans up to Rs 5 billion for the micro, small and medium enterprises (MSME) sector across India.
Vijaya Bank's fiscal third quarter (Oct-Dec) net profit fell 18.13% to Rs 1.24 billion from Rs 1.51 billion in the same quarter a year ago on account of high provisions.
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