Bank Of Baroda Sign MoU With Ten Companies To Support Micro-Entrepreneurs

State-run Bank of Baroda signed a Memorandum of Understanding with ten companies including Uber, Oyo, Lava and Flipkart to provide loans to members in their supply chain like drivers and retailers in its efforts to raise its exposure to small enterprises.

“We want to target around 5,000 micro-entrepreneurs and spend at least Rs.500 crores in 2018-19,” said PS Jeyakumar, CEO of Bank of Baroda. The bank will sanction these loans online, instead of through branches. “The bulk of loan sanctions will be automated.” 

Micro and small enterprises are the backbones of the Indian economy and this sector contributes approximately 31% to India’s GDP, 45% of exports and provides employment to over 100 million.  

Rapid advances in information technology have given rise to new business opportunities in the MSME segment, especially around organized retail, e-commerce, entertainment etc. and their derivative segments. This has resulted in the emergence of “Twin-Tracks” in the MSME segment, one comprising of old economy enterprises and the second comprising new age economy.

Speaking on the occasion Mr. P. S. Jayakumar, MD & CEO, Bank of Baroda said, “We are committed to working jointly with various partners to support MSMEs and Start-Ups. We have entered into these MOUs with a view to enhance our footprint in the delivery of products and services in MSME eco-system. 

This is an endeavor to simplify operational processes and to improve access to finance for MSMEs from early to growth stage. Throughout FY18-19 we will continue to launch various initiatives in this direction that will support e-commerce and their derivative segment”

As one of the leading Banks in the country, Bank of Baroda has been in the forefront in ensuring smooth flow of credit to MSME segment through various initiatives.  The Bank has developed structured products and realigned processes that enables MSME to access credit seamlessly. As on 31st March 2018, the Bank has financed about 5.37 lakh micro entrepreneurs with aggregate outstanding of Rs. 32,766 crore.

Mayank Mehta, Executive Director, Bank of Baroda said, “Technological developments have resulted in a paradigm shift in the economy.  Emerging new business revolving around organized retail, e-commerce, entertainment etc. have provided a wealth of opportunities to micro-entrepreneurs to expand their market and customer base without having any physical setup. 

Bank of Baroda is redefining the credit underwriting process by utilizing the latest technology, platform data for assessments and monitoring thus supporting new business segments that are emerging in the gig economy.”