CSB Bank Aims For 32% SME Growth By FY24 End
Private lender CSB Bank is setting its sights on a 32 per cent expansion in the small and medium enterprises (SME) segment for the fiscal year 2023-24, according to Shyam Mani, Group Head of SME.
"We've seen consistent growth averaging 20-25 per cent in our SME business over recent quarters. In Q2FY24, our SME segment surged by 22 per cent. Our aim is to achieve a 32 per cent growth by the end of FY24," mentioned Mani.
Highlighting successful collaborations with local trade bodies and fintech firms, Mani expressed plans for business expansion in Delhi, Pune and other parts of Maharashtra.
Presently, the bank's SME portfolio stands at around Rs 2,377 crore, accounting for approximately 11 per cent of the total loan book.
Industry Trends
The RBI's latest sectoral credit data revealed a decline in lending to industries, including micro, small, medium and large entities. SME lending growth has been moderate across several quarters, but Mani anticipates an upswing in lending in the October-December FY24 quarter, especially in segments like medium enterprises and solar financing.
SME Finance Focus
SME finance remains a cornerstone of growth for CSB Bank, emphasised Mani. The bank has been aggressively growing its SME finance segment for over a year, considering it a flagship product pivotal to overall expansion.
Fintech Collaborations and New RBI Directives
Fintech partnerships have played a pivotal role in expanding into new territories and customer segments, noted Mani. Moreover, following an RBI directive, banks are expected to intensify lending to SMEs, foreseeing substantial demand in this segment.
Impact on NBFCs
The rise in risk weights due to new RBI norms might affect NBFCs' cost of funds, causing them to explore alternative funding sources in addition to banks, Mani suggested.
