Many banks have introduced special schemes to step up lending to the micro, small and medium enterprises (MSMEs) sector.
Bankers feel that such small ticket loans will be much safer in terms of repayment as compared to large corporate sector loans.
"We have declared the year 2013-14 as the MSME Year and are hoping to achieve 60 per cent credit growth under this portfolio," said Mr. M. Bhagavantha Rao, Managing Director of State Bank of Hyderabad. SBH is offering MSME loans at a lowest interest rate in the country of 11.75 per cent.
According to Mr. B.A. Prabhakar, Chairman and Managing Director of Andhra Bank, banks are now focusing on MSMEs as the corporate sector is unable to absorb the available credit and also because of the revised definition of priority sector by the Reserve Bank of India.
Andhra Bank presently has Rs 14,000 crore under MSME portfolio this fiscal and is aiming for a 25 per cent growth during the next financial year.