IDBI Bank targets Rs 6,000 cr SME loans

Reflecting a turnaround in credit demand, public sector lender, IDBI Bank, plans to disburse credit worth Rs 6,000 crore to small and micro enterprises (SMEs) in the current financial year.

There was an improvement in business sentiment and segments like auto components and garments reported a better outlook, Executive Director, T R Bajalia said. The bank extended loans worth Rs 2,000 crore during April-September 2010, he added.

Last year, credit demand was subdued due to the global slowdown. In the first six months, the bank lent Rs 1,000 crore to SMEs, he added. Now, the outstanding loan portfolio of SMEs stands at Rs 12,000 crore.

Meanwhile, to improve energy efficiency in the SME initiative, IDBI has signed a pact with the US-headquartered World Resources Institute (WRI). Under the pact, the bank would finance Micro, Small & Medium enterprises (MSMEs) in India for implementing Energy Saving Company (ESCO) projects.

The funding would cover areas like climate change, ecosystem protection, environmental governance, green markets and sustainable transportation.

WRI would provide consultancy to SMEs to implement energy-saving technologies and systems. It would also guarantee a return to SME units from the new system. The savings in cost would be used to repay loans.