'Our Loans are Tailor-made to Meet Biz Requirements'
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In an exclusive interview with Entrepreneur, Amit Bhatia, Head- Private and Commercial Banking, Deutsche Bank (India), shares the bank’s vision for small and medium enterprises (SME) banking along with its commitment to digitization for a balanced and healthy growth.
What are the Steps Taken by Deutsche Bank to Support SME Financing?
SMEs contribute to approximately 40 per cent of the country’s GDP and generate huge employment in the organized and unorganized sector.bank
Deutsche Bank is committed to support the growth and competitiveness of this critical sector. Over the years, we have undertaken various initiatives, like SME events, to create awareness, introduced systems of financial consulting to enable access to credit and also improved the digital facilities of the bank. Also, we have utilized government initiatives for providing financial solutions to the micro, small and medium enterprises.
And, What are your SME Lending Criteria?
It is based on the robustness of a business model. We analyze and access the promoter’s competence in the business, competitive market scenario, industry performance, turnover growth of the SME, business margins and profitability and use the credit bureaus effectively. What is your commitment for SMEs in this financial year? In the current financial year, we are aiming at fresh lending which is about 40 per cent more than last year, across all our propositions – business installment loans, loan against property and trade and working capital lines.
What do you Think SMEs or Startups Should Consider while Raising Funds?
In the current environment many options are available with SMEs and start ups to raise funds for their business. Raising funds through debt by leveraging the entrepreneur’s personal collateral or through various government schemes is quite feasible and beneficial from taxation point of view. Raising equity may not be easy initially; given the size of equity offerings may be too small for an SME to go public.
Any Initiatives to Support Women Entrepreneurs?
Deutsche Bank is the first bank to launch business loans designed exclusively for women entrepreneurs.
One such is ‘Eve business loan’ which was launched in 2016. Our loans are tailor made to cater to business requirements and individual banking needs.
How are You Keeping your Focus on SME Lending at the Same Time Maintaining a Healthy Growth?
We continue to keep abreast with the economic trends and try and modify our product/policies accordingly. Additionally, we are investing in technology constantly to help digitize our processes. The bank has a very strong relationship management model and continues to provide value added services. We will continue to maintain a healthy mix of secured and unsecured lending portfolio.
How do you See Fintech Companies Disrupting the Overall Sector?
Fintechs can be both disruptors as well as enablers for the banking industry. Fintechs on an ongoing basis are developing innovative products for SMEs, thus helping them reduce their working capital requirement along with managing their financial needs. They are also acting as an enabler to banks by providing solutions toward ease of access, faster loan processing and also helping in risk management through in-depth analytics, improved oversight on cash flows and collateral tracking. Banks are engaging with Fintechs in all spheres to benefit each other.
Any Special Initiatives for SMEs?
Through our expertise on trade products and by leveraging actively on Deutsche Bank’s international branch presence, we help facilitate seamless cross border transaction services through our banking platform acting as a one-stop shop for the SME banking needs.
(This article was first published in the November issue of Entrepreneur Magazine. To subscribe, click here)