Breathing life to retail business

Retailer: How SBI is helping out the retailers in financing their business? What are the schemes do you have for retailers? Name a scheme which has really become popular among retailers?  Do you have any specific offers for small and medium retailers?

Manas Kumar Nag (MKN): SBI is the pioneer in financing the needs of the retail business segment. Traders, dealers and franchisees are all catered to by State Bank of India under different schemes and products.  Cash credit limit for traders is a working capital limit which is based on the inventory cycle. The limit is renewed every year based in the financials. Traders easy loan is a limit sanctioned to traders against mortgage of property.

SBI Shoppe is a scheme for purchase of a shop or for doing up the interiors of the shop. For traders dealing in commodities, we extend loans against commodity warehouse receipts. We also have SME car loan which can be availed by the retailers and the loan can be on the balance sheet to avail depreciation benefits. Besides, we enter into tie-ups with industry majors to provide inventory funding for their dealers. Depending on the value of the tie-up and the comfort provided, we sanction the loans on improved terms and conditions.

Franchisees of retail brands are also funded by us, for example, Subway, Apollo healthcare clinics, and many others. Our finance is not restricted to the front end of retailing but extends to the vendors supplying or in the line of manufacturing of these products. We have liberalised SSI scheme for the manufacturing sector. From time to time we offer special concessional rates of interest under various schemes.

Retailer: What is the procedure to apply for a loan? What are the criteria required to avail loan facility for a retail business.

MKN: The procedure is simple. The prospective borrower has to furnish the documents required for the KYC (Know Your Customer), information about his existing or proposed business activity and, lastly, financial data (balance sheets /profit and loss a/c).  The proposals are then examined for their viability. The appraisal is done based on certain parameters. For loans below Rs 25 lakh it is generally a simple scoring model.  Besides, we have more than 100 SMECCs (loan factories) which are engaged only in appraising and sanctioning of advances. This is with a view to provide standardised approach and specialisation for faster dispensation of credit.

Retailer: So far how many retail ventures you have financed? 

MKN: We have over 800000 accounts in this segment across all verticals.

Retailer: How are you promoting the financing opportunities? How is the response so far? How do you reach out to rural retailers?

MKN: SBI, with its reach of 13100 branches, has wide penetration across the country.   We also have marketing sales force in urban centers. For large value accounts, we also have the concept of relationship manager. We also have 24X7 helpline. Out of 13100 branches, 5000 branches are in rural areas.  Another 3800 branches are in semi urban areas. With these 8800 branches we have a deep reach in rural areas, unmatched by any other bank. There is also a special marketing outfit in the rural areas.

We also have a cluster based approach. We identify various clusters like garments, light engineering, artisan cluster and conduct in-depth studies. Based on the findings we have a scheme specially tailored for a cluster.