Share market news – 17th sep 2016 by Trade India Research.

SBI plans to grow SME lending by 10-12%index

State Bank of India, India’s largest lender, wants to grow loans to small and medium enterprises (SMEs) by at least 10-12% this year and improve their order book positions and cash flows while the corporate sector continues to be under stress.

The SME sector, which generates the maxumum employment, suffers from absence of bank credit as 45% of the country’s vast SME segment still rely on informal sources of funding. The sector has been slack due to general sluggish economic growth impacting their financials negatively .

Last fiscal, SBI’s SME loansgrew at a modest 4.4% to Rs 189,536 crore.

“With improvement in their cash flows, we see 10-12% loan growth very much feasible this fiscal. Although, internally, we would like to aim for 14-15% growth,” SBI managing director Rajnish Kumar said on Friday in Kolkata.“We have also moved to cash flow-based financing from balance sheet-based funding,” he said at an event organised by the Confederation of Indian Indust ry (CII). SME contributes 12% of SBI’s total loan book of `15,09,500 crore.

Kumar said the bank is also focusing on supply-chain financing and receivable-based funding to boost SME loans. SBI deputy managing director Sunil Srivastava said that the bank monitors SME cash flow in a more granular way to boost healthy lending.

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