"For Startups We Have Developed An Entrepreneur Account" To support Start-up India and Make in India programs, DBS Bank has developed an "Entrepreneur Account"

While registering 30 percent year-on-year growth in small and medium enterprise (SME) lending, DBS Bank India has added nearly Rs 925 crore and about Rs 325 crore of fresh assets in SME lending in the last fiscal year and in the first quarter of the current fiscal year, respectively.

To support Start-up India and Make in India programs, the bank has developed an "Entrepreneur Account" to help start-ups and ease them into mainstream banking with transactional efficiencies and digital tools. Amitabh Verma, Head, SME, DBS Bank India, spoke to Entrepreneur and divulged the bank's plans to help SMEs in their growth story.

How is DBS Bank capitalizing on the strategic advantage of its established branch network to lend to SMEs across regions?

DBS, headquartered in Singapore, has been one of the highest rated banks in the Asia-Pacific region. The bank has been recognized for its leadership in the region, having been conferred Asia's best bank and has been consistently ranked as the safest bank in Asia. We have recently been named the World's best digital bank as well.

The brand equity, therefore, helps to establish ourselves as a reputed name with trusted partners in the emerging markets, especially among SMEs in India. A strong brand name, coupled with strong value proposition and innovation, has helped us grow in SME segments across all regions. Our large presence in the Asia-Pacific region helps our customers leverage our Asian Insights and network for business expansion.

How do you support the growth of SMEs with financing and consulting?

We have a full spectrum of products and services that we offer to our SME customers. While lending is one of the key propositions, we back the same with a strong proposition in trade, cash, forex and transactions. Our internet banking platform gives customers a superior experience. We believe that technologically-advanced solutions across the spectrum of products we offer will give a winning edge to our SME clients. We have received positive promoter feedbacks on the same.

How do you deliver fresh thinking with unique expertise in the Asian market?

We undertake customer journeys to get insight into customer lives, requirements and pain points. We come back to the drawing board to find a solution that would resolve the customer's real issues, which may not be always related to banking. We realize that giving unique and customized solutions (and preferably delivered digitally) increases effectiveness of SME clients. We have tried to take best practices from several Asian markets and have tried to "productize" them for use by SMEs in India. One example is "Grow App", which helps SMEs compare and contrast their working capital metrics (payable days, inventory, receivables, and so on) with the best in the industry to find opportunities for higher efficiencies.

How do you observe the growth in SME lending in the age of start-up boom and the support from Mudra Bank?

Indian SMEs are witnessing a radical transformation. Boom in startups, new technology, and global strategies means adoption to change is the new mantra. While Mudra Bank will lend considerable support, the introduction of Stand Up India scheme will boost the lending space further. However, in the short run, my view is this space will stil be dominated by private investors and venture capitalists, and the banks will support the ecosystem in newer and more innovative ways in the days to come.

How much have you disbursed in the last financial year and in the first quarter of current fiscal year?

DBS Bank India added nearly Rs 925 crore and about Rs 325 crore of fresh assets of SME lending last year and in the first quarter of this fiscal year, respectively. This indicates above 30 percent growth rate of assets addition as compared to last year. We have had good growth in the SME segment including addition of a number of new SME clients.

What is your current fiscal year target of SME lending?

We continue to grow aggressively and expect over 30-40 percent growth in the current financial year. We are set to increase SME contribution in the overall DBS India books to over 10 percent in the current financial year.

How are the Reserve Bank of India (RBI) policies encouraging SME lending?

RBI has been supporting SMEs by creating an infrastructure that understands and supports their growth. Several policies for MSMEs, priority sector lending, etc., have helped SMEs. The key is financial inclusion so that majority of SMEs get access to funding from banking/formal lending systems.

Do non-performing assets in your SME portfolio concerns you?

DBS has been accelerating SME growth in the recent years and we have been able to build a strong book. Defaults have been well within the acceptable threshold levels. We continue to use technology and early warning tools to supplement our aggressive SME growth strategy and this has helped us work closely with our clients.

How are you supporting Start-up India and Make in India programs?

We support Start-up India and Make in India initiatives since they provide a boost to SMEs. We contribute to the schemes through several initiatives. An example is a supply chain program that facilitates support to SMEs contributing to Make in India for larger/ global players, say in the automotive and auto ancillary segments. There are several other such initiatives and we are getting good traction here. For startups we have developed an Entrepreneur Account, which helps startups ease into mainstream banking with transactional efficiencies and digital tools. We are also in the process of putting out some specific policies aligned to the detailed guidelines shared by the Government of India, which will further embed us to these excellent causes.

Are you fulfilling what Mudra bank expects from your bank?

DBS Bank has applied for a wholly-owned subsidiary, which will allow us to cater more meaningfully to all segments of SME. In the interim, we continue to provide solutions/support through use of technology to the lower end of SMEs within the constraint of our current branch network.