Hyderabad, Oct 31 (KNN)  The State Bank of Hyderabad (SBH) is hoping that the micro, small and medium enterprises (MSMEs) will contribute 19-20 per cent to its total advances by the end of this financial year. 

“We are making all-out efforts to take the MSME advances’ share to 16 per cent by March 2014, as against 14 per cent in the previous year,” said SBH Managing Director M Bhagavantha Rao Rao. 

The bank had already disbursed close to Rs 2,000 crore to the sector during the first six months of the current financial year, Rao said as he delivered his special address at a workshop on ‘Project appraisal for SME finance’ organised by the Confederation of Indian Industry (CII) here on Wednesday. 

The MD of the bank assured increased focus on the MSME sector, despite the challenges of collateral securities in terms of extending project financing.

Also speaking at the workshop, Co-Convenor of CII AP MSME panel and Chief Executive of Surya Engineering Works, Y V Krishna Mohan said, “High interest rates are a deterrent. Besides, SMEs have limited access to equity capital. Hence, we are bringing in angel and venture capital investors and private equity partners to help SMEs raise second and third round of funding to upgrade to newer technologies and reach scale.” 

Expressing similar views, Murali N Krishna, executive vice-president (corporate banking -- Andhra Pradesh and Karnataka), Kotak Mahindra Bank Limited, said though a banker considered an SME as a startup company as there would not be any track records, cash flows from a large customer of the SME could be a risk-mitigant for the bank to extend financial support. (KNN/SD)