IOB expects 25 pc growth in advances to SMEs

MUMBAI: Public lender Indian Overseas Bank ( IOB) expects its advances towards the micro, small and medium enterprises (SMEs) to grow by 25 per cent by March, a top official said.

"SME is our core area of focus. We have achieved 20 per cent growth in lending to the sector till now. By March, we expect it to go up to 25 per cent," IOB Chairman and Managing Director M Narendra told PTI on the sidelines of an SME Manufacturing Summit here today.

The Chennai-based lender has disbursed nearly Rs 2,000 crore till now, which is a 20 per cent growth compared to the total MSME advances last year.

"The MSME sector has not been much impacted by the current macroeconomic situation. Since we offer them a preferred interest rate, we do not expect the credit demand to slow down," he said.

"Our lending to this sector saw a 25 per cent growth last year. We expect a similar growth rate in this fiscal as well," he said.

The lender expects its total advances, both domestic and overseas, to grow between 18 and 20 per cent by the end of this fiscal.

"At present, our total domestic loan book size is over Rs 1,18,000 crore, while overseas is around Rs 15,000 crore.

"The market has not been in a very good shape due to international and domestic factors. But with inflation likely to come down, we expect an increase in our overseas loan book, especially from big and medium corporates," Narendra said.