HDFC Bank said its MSME loan portfolio grew 30 percent from December 2019 to 2020 and remained at pre-Covid levels.
Credit and Financing for MSMEs: As part of the member lending institutions supporting the government’s Emergency Line of Credit Guarantee Scheme (ECLGS) for MSMEs, the private sector lender HDFC Bank has disbursed around Rs 23 billion as of December 31, 2020. “HDFC Bank is among the top banks in terms of credit extension under the ECLGS scheme which stood at around Rs. 23 billion rupees as of December 31, 2020, “the bank said in a statement. The government had launched the Rs 3 lakh crore scheme on May 13, 2020, as part of the Atmanirbhar Bharat package to provide emergency credit to bank and NBFC companies up to 20 percent of all outstanding credit as of February 20, 2020.
“We are aligned with the government’s vision of supporting the MSMEs sector, which is among the largest job creators and an engine of economic growth. Even during the closure, it has been a pride and privilege to serve our MSMEs clients in all sectors / industries during the closure, especially in semi-urban and rural areas, ”said Sumant Rampal, Senior Executive Vice President, Commercial Banking and Health. Finance, HDFC Bank.
Financial Express online had reported last week that banks and NBFCs had already sanctioned 82 percent of the target amount of Rs 3 lakh crore as of February 28, 2021. According to data from the National Company of Credit Guarantee Trustees (NCGTC), the loan amount sanctioned under the scheme remained at 2.46 lakh crore rupees until the end of February, MSME Minister Nitin Gadkari said in a written response to a question in the Rajya Sabha. Furthermore, of the total of 92.27 lakh of borrowers under ECLGS as of February 28, 87.50 lakh (95%) of borrowers were MSMEs.
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Furthermore, the Finance Ministry has already spent the total amount of Rs 4,000 crore allocated for the implementation of the scheme for the 2020-21 financial year, according to government data. The income expenses incurred by the Department of Financial Services for the ‘assistance to the NCGTC, which is the provider of guarantees under the ECLGS scheme to the member lending institutions (MLIs), stood at Rs 4,000 crore as of January 22, 2021, according to data shared by Finance Minister Anurag Singh Thakur at the Lok Sabha on Monday. The amount allocated to it for fiscal year 21 was 4 billion rupees.
HDFC Bank also announced that its loans to MSMEs have grown by 30 percent from December 2019 to 2020 and were at pre-Covid levels. “We communicated with them with a set of customized products that they could easily access through physical or electronic channels,” added Rampal. A PTI report quoting HDFC Bank on Friday said the bank’s MSME book stood at Rs 1.4 lakh crore in December 2019, which grew by more than Rs 60,000 crore or 30 percent to Rs 2,01,758 crore in the December quarter 2020. The growth provided HDFC Bank with a 10.6 percent share of MSMEs lending system-wide to become the second largest lender in this segment after SBI.
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