October 23, 2021

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HDFC Bank aims to tap more rural MSMEs; plans to expand reach to 2 lakh villages in 2 years

Towards its goal of rural expansion, HDFC bank is looking to hire 2,500 people in the next six months. (Image: Reuters)

Credit and Finance for MSMEs: India’s most valuable private lender HDFC Bank on Sunday said it is aiming to double its rural reach in the coming two years while it looks to “extend its leadership in MSME banking.” The bank is targeting expansion of its services to 2 lakh villages in the coming 18-24 months from the current 1 lakh villages. It is planning the expansion through a combination of branch network, business correspondents, business facilitators, CSC partners, virtual relationship management, and digital outreach platforms, it said in a statement. This will increase the bank’s rural outreach to around one-third of India’s villages.

Towards its goal of rural expansion, HDFC bank is looking to hire 2,500 people in the next six months. “India’s rural and semi-urban markets are under-served in credit extension. They present sustainable long-term growth opportunities for the Indian banking system. HDFC Bank remains committed to extend credit, responsibly, in service of the nation. Going forward we dream of making ourselves accessible in every pin code,” said Rahul Shukla, Group Head – Commercial and Rural Banking, HDFC Bank.

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HDFC Bank, which claimed to be the second-largest lender to the MSME segment in India, offers its services to MSMEs in over 550 districts in the country. It already offers customised offerings such as pre-and post-harvest crop loans, two-wheeler and auto loans, loans against gold jewellery, and other curated loan products in unbanked and under-banked geographies. The bank saw its MSME loan book grow by 30 per cent from December 2019 to 2020 and stand at pre-Covid levels, according to a statement in March this year. It is also among the top banks in terms of extension of credit under the ECLGS scheme which stood at around Rs. 23,000 crore as of December 31, 2020.

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Earlier this month, HDFC Bank had signed an MoU with National Small Industries Corporation (NSIC) to offer credit support to MSMEs. The bank will accept loan applications forwarded by NSIC and consider sanctioning loans on a merit basis and as per the bank’s lending norms. It will also look at financing projects relating to MSME Sector at different places where bank branches are located or other important industrial centers in the country. Likewise, in partnership with the government’s Common Service Centre Special Purpose Vehicle (CSC SPV) in July, HDFC Bank had launched an overdraft facility of Rs 50,000- Rs 10 lakh for small retailers operating for a minimum of three years by providing six months bank statement from any bank.

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