SBI will reconfigure collateralized MSME lending protocols to cash flow based and structured by guarantee
“SBI Chairman C.S. Setty, while speaking at the Financial 3.0 Summit organised by the Confederation of Indian Industry, pronounced SBI’s intent to reconfigure MSME lending protocols from a collateralized framework to a cash flow-based framework, secured by credit guarantees for MSME loans of up to Rs 5 crore.
Setty further spoke about procedural hindrances in MSME, including lack of formalization and dearth of right credit assessment and delivery skill sets in niche segments.
He emphasized the need for innovation in credit delivery mechanisms for advanced tech projects and emerging technologies like battery storage and green hydrogen. Setty underscored the fact that SBI runs the largest project finance book in the country today but still lags behind in skilled competence and structured mechanisms for credit facilitation in emerging technology areas. Setty stated that specialized niche verticals are the need of the hour, and for that, SBI is working with multilateral development banks and some large MNC banks to structure this transformation.”
