ED IDBI Red-Flags Concentrated Exports

(MENAFN- KNN India) Kolkata, Sep 10 (KNN) At the ET Make in India SME Regional Summit in Kolkata, IDBI Bank highlighted its strategic role in supporting India's micro, small, and medium enterprises (MSMEs) amid global trade disruptions and economic uncertainty.

In a fireside chat titled 'Catalysing Make in India Growth: IDBI Bank's Strategic Imperatives for Empowering MSMEs,' Nagaraj Garla, Executive Director, IDBI Bank, highlighted the risks of concentrated export exposure, with the United States alone accounting for around 20 percent of India's exports, as reported by ET.

With MSMEs contributing nearly half of the export basket, the sector remains vulnerable to global headwinds.

Garla cautioned that the ripple effects of trade disruptions cannot be dismissed, but underlined the resilience of Indian businesses, recalling their adaptability during the Covid-19 crisis.

He noted that while export credit constitutes only 1 percent of banks' exposure, as much as 10 percent of loans could be indirectly affected, necessitating recalibrated risk frameworks.“We're not stopping lending,” he said.

Yet, he stressed resilience and adaptability, recalling how businesses managed the Covid-19 crisis as a precedent for overcoming present challenges.

From a policy perspective, he pointed to government initiatives to diversify trade partnerships with nearly 40 countries, which could provide stability in the medium term.

At the same time, he highlighted the role of banks in fostering competitiveness, citing the adoption of solar power by MSMEs as a cost-cutting innovation with returns often realised within three years.

Garla also outlined IDBI Bank's 'phygital' approach, combining digital efficiency with human engagement.

He said that while most small-ticket loans are processed digitally, larger exposures continue to rely on personal oversight from branches and relationship managers.

“Technology accelerates, but it doesn't replace human empathy and understanding,” he said.

Turning to West Bengal's MSME landscape, Garla recognised the state's unique position, with nearly nine million MSMEs and strong women-led participation - 36 percent promoted by women and 23 percent fully women-owned. IDBI Bank, he said, offers tailored products for both traditional sectors such as jute and tea, as well as emerging industries and startups.

Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, the bank provides collateral-free funding up to Rs 20 crore, easing access to capital for entrepreneurs.

He added that the bank is moving towards hyper-personalised credit solutions for MSME clusters in collaboration with rating agencies, emphasising faster and more customised financing.

Looking ahead, IDBI Bank aims to triple its MSME credit exposure in West Bengal over the next three years, reflecting its long-term commitment to the region.

“MSMEs are a top priority,” Garla concluded.“We're driving awareness and credit flow to empower enterprises of all sizes, especially those with strong business models, even without collateral.”

(KNN Bureau)

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