Bank of Baroda steps forward to extend a helping hand to Small and Medium Enterprises (SMEs) in the state of Jharkhand amid financial crisis.

The Bank is planning to lend another Rs 100 crore to SMEs in the state in the ongoing fiscal and at the same time also deciding on opening of two new branches. It has already extended funds worth Rs 100 crore to the sector in the first half of the fiscal, said the zonal head (Bihar, Jharkhand and Orissa) and deputy general manager of Bank of Baroda, Mohar Singh.

The bank has also been extending credit aggressively to the SMEs and agriculture sector across the whole nation. "We have set up a SME Loan Factory at our Bistupur branch that is registering the highest profit in the entire state. Concept of the SME Loan Factory took birth in June 2007 and in the last financial year we had given a loan to the tune of Rs 100 crore. However, this year we are planning to double its figure to Rs 200 crore and fund more SMEs," said Singh.

The facility given to entrepreneurs has helped the bank also to raise its amount of loan disbursement. "We provide loan to entrepreneurs in just 14 days from the date of application. The small industrial units are with investment less than Rs 5 crore in plant and machinery while the medium-scale units are those that have invested Rs 10 crore in plant and machinery," said a bank official.

The official also informed that the bank is offering loans to rural population via Baroda Grammen Paramarsh Kendra at Galudih. It is the only financial body in state that is providing credit as well as advice to the rural people.

"Rural people who come to this bank get free advice on how to invest their money, not only in bank but in other financial institutions. This concept was started a year ago and our Galudih branch is one of the 51 centres in country that play the role of advisors," said Mr. Singh.

Bank of Baroda is planning to expand its operations in Jharkhand in order to provide better facilities to its customers. To comment on this Mr Singh said, "We have 39 branches and two more would come up this year. We have 15 urban branches, 12 semi-urban and 12 rural ones."

This move by Bank of Baroda seems unusual when Indian banks are accumulating on bad loans and slowing down on providing funds to the different segments including SME.