Strategic approach for improving market share in micro, small and medium enterprises lending - a case study

Credit facilities for MSME sector has become need of the hour for the banking industry in Banks are working with policies and assessment of the MSMEs and their repayment capacity based on the expected financial performance. MSMEs also looking for the support of banks and financial institutions. In majority of the cases, banks and financial institutions approach the MSMEs and evaluate their credit requirements and extend tailor made credit. The case study is such a scenario where banks move forward with a strategy to get improved market share in MSME lending.

The present case is a real strategy implemented by a leading public sector bank which has greater presence in Hyderabad city of Telengana. The purpose of the case is to discuss what made the bank successful and role of effective communication.

Similar strategies can be useful for extending credit to MSMEs. This case discussion may be relevant to such situations and find a way to make effective strategies specific to MSMEs. Such discussions will help in enlightening the banks, financial institutions and MSMEs in future to extend credit more effectively.

The analysis reveals that the banks direct approach to MSMEs and collective effort of bank’s staff and effective communication made by the bank to achieve the target lending to MSMEs.