HDFC Bank supports SMEs and MSMEs | Sunday Observer

HDFC Bank supports SMEs and MSMEs

From 2013, the HDFC gave tremendous support to the government in the growth of a vibrant middle class while considering commercial profits. This also helped the HDFC to build its own image as a national Bank.

By 2014, success in Micro and SME lending prompted the bank to establish a separate Department in the Head Office exclusively for Microfinance and Small and Medium Enterprise activities, catering to various untapped geographical areas and Rural Financial Markets.

However, core business of the HDFC bank remained as housing. While the bank continued to support “the provision of housing for the economically disadvantaged sections of the society as envisaged by the State, HDFC in 2014 introduced its own “Dirimaga” Microfinance loan scheme focusing on small scale clients to develop their existing projects or start new income generation activities.

The HDFC with the assistance of the Central Bank, commenced entrepreneurship development by conducting various programs such as “financial literacy and Entrepreneurship Development programmes” throughout the country and entered in to Central Bank loan schemes, available to the SME sector.

In 2014, HDFC Bank signed an MoU with the CBSL as a PCI for Commercial Scale Dairy Development Loan Scheme (CSDDLS) and took positive efforts, within very short period, to promote this credit scheme among the commercial scale dairy farmers of the country with the assistance of large scale stakeholders involved in the dairy industry.

The Bank has so far conducted several staff awareness programmes and Financial Literacy programmes for entrepreneurs in the milk industry, Dairy farmer meetings at District level and also number of pocket meetings for the members of milk collecting societies with collaboration of the above mentioned Companies.

HDFC Bank is proud to state that although the bank is mainly catering to housing, the bank achieved a phenomenal disbursement of Rs. 2,559 Mn. within a very short period of time from 2013 onwards.

In 2015, HDFC Bank entered in to another major SME credit scheme named “Saubaghya” with a view to catering to the Small and Medium industries. Through this Saubaghya loan Scheme, the Bank had an opportunity to penetrate in to various industries in the country and capture new markets to the Banks’ lending portfolio and cross sell other products.

HDFC Bank of Sri Lanka, signed a Memorandum of Understanding between HDFC Bank and the National Enterprise Development Authority (NEDA) for developing the SME sector in Sri Lanka.

With this move HDFC Bank will act as the official Banker of NEDA Entrepreneurship Development Programs.

NEDA, is a Government institution which promotes, supports, encourage and find suitable financial assistance for the development of Small and Medium Industries in Sri Lanka.

With this initiative, both organizations will work together in the development of the SME sector in Sri Lanka. Small and Medium Enterprises play a crucial role in the economic development process and it helps to alleviate poverty and find solutions for unemployment in the country.

Through this effort, it is expected to create opportunities for small and medium scale businesses to diversify towards industrial and economic growth, empower people, human capital development with technical skills being an integral component of enterprise development and facilitate the access to finances required for enterprise development and operations.

In achieving the objectives of this initiative, the HDFC Bank will coordinate with NEDA to explore the possibilities of promoting credit facilities among the prospective MSME identified by the Bank.

The NEDA will arrange to introduce viable MSME to the HDFC Bank who seek financial assistance for SME Development activities eligible under various Development Credit Schemes available in the Bank.

Both Bank and NEDA will jointly organize knowledge sharing training programs, capacity building, Entrepreneurship development, Financial Literacy Credit Clinics, Recovery programs and also minimize knowledge gap between MSME’s and related institutions of the country for the MSME with the professionals in the SME sector on periodic basis.

With a view to exploring the possibilities to cater to the SME export sector under various development credit scheme available in our Bank, the HDFC bank came to partner with the EDB in 2016.

EDB appreciated the Bank’s role in SME development as a state Bank and they agreed to work together with the HDFC Bank on much focused sectors such as SME Apparel sector, Clay Roof tiles, Green & Sustainable Products, Business Startups and the Horticulture sector. The EDB appreciated the SME exporters and prospective exporters can be greatly benefited by the “Saubaghya” Loan Schemes and we do hope we could work towards giving the best interest rates among the Banks.

The trainees passed out from vocational training institutions gain knowledge and skills in different subjects varying from Agriculture to Industrial and Information Communication Technology. Though they are fully competent, it is difficult for the rural youth to find a job since most of the industries are located in urban areas. At the same time, some of the trained youth are willing to start self-employment.

However, lack of financing facilities is a major barrier to make them emerge as entrepreneurs. Hence, MSDTV started the ‘Self Employment Promotion Initiative’ (SEPI) which is a sub loan scheme providing financial assistance to trained youth who are passed out from recognized vocational training institutes, for establishment of their own self-employment project. Bank has introduced its owned Development Loan Scheme specially cater to SME sector to start new business or expansion of existing businesses. This loan scheme cover Agriculture, Industrial and Service sectors. The maximum loan amount is Rs 25 Mn and repayment period is five years.

We have already signed an agreement with CBSL for the above credit scheme. This credit scheme is mainly target income generation activities of rural women and unemployed youths. The maximum loan amount is Rs.150,000 and repayment period is three years.