The backbone of India's economy: How Yes Bank supports MSMEs-Mr. Rajan Pental, Executive Director, Yes Bank

Beyond business needs, Yes Bank is focused on serving the MSME ecosystem through its family banking proposition, loyalty rewards, and dedicated relationship managers

BRAND CONNECT | PAID POST

Published: Aug 14, 2024 12:35:36 PM IST

Updated: Aug 14, 2024 06:37:58 PM IST

When discussing the backbone of any economy, it is essential to highlight the people who wake up every day and put in the hard work—often without the headlines. In India, the MSMEs—Micro, Small, and Medium Enterprises—are these unsung heroes. They drive growth, create jobs, and make up nearly 90% of businesses globally. In India, they contribute a significant 29.2% to the GDP and 45% to the total exports. Beyond the numbers, they are the heartbeat of the economy, employing 12 crore people across diverse sectors like agriculture, chemicals, electronics, and textiles.

Despite these impressive figures, Indian MSMEs lag behind their global counterparts in several areas. They face numerous bottlenecks, including accessing timely information, irregular and inadequate financial resources, a shortage of skilled labour, limited access to credit and affordable technology, and widespread informality. These challenges collectively hinder their growth and competitiveness on the global stage.

Recognising this, YES BANK has dedicated substantial efforts to support and empower MSMEs through comprehensive financial services, innovative digital solutions, and strategic partnerships. The Bank aims to position itself as the leading provider of innovative solutions for MSMEs in India through initiatives like YES Business.

Before delving into YES BANK’s offerings, it is crucial to acknowledge the Indian government’s efforts to bolster MSMEs, particularly during the COVID-19 pandemic. The Emergency Credit Line Guarantee Scheme (ECLGS) provided critical financial support, helping many MSMEs survive the crisis. Additionally, the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) offers guarantee coverage for loans up to INR 5 crore, facilitating easier access to credit for Micro & Small Enterprises. Interest subventions and capital subsidies are other measures that enhance the financial stability and growth prospects of these enterprises.

Given the diverse clientele of MSMEs in India, ranging from small kirana stores to retail chains, manufacturing and service units to traders and exporters, the diversity is immense. This diversity necessitates a tailored approach to banking services, and YES BANK meets this need by offering a comprehensive spectrum of curated financial products. These products are designed to meet the distinct requirements of varied MSME segments, including cash credits, overdrafts, term loans, cash management and digital solutions, export-import financing, and foreign exchange services. Additionally the Bank’s dynamic tiering in current accounts (Freedom Flexi) provides MSMEs with flexible and scalable banking solutions that adapt to their changing business needs.

YES BANK’s offerings are meticulously crafted to cater to manufacturers, service providers, retailers, wholesalers, and professionals, addressing the specific financial requirements of each segment.

Driven by the aim of delivering an unmatched banking experience to MSMEs, YES BANK has made considerable investments in digitising its MSME banking services. The Bank’s digital initiatives include platforms like YES Connect, YES Smart Pay, and the forthcoming upgraded YES Biz (App & Portal) and Digital Lending platform. These tools are aimed at creating operational and financial efficiencies for MSMEs, simultaneously enabling a superior digital experience. The Bank has also invested in enhancing its efficient underwriting process by leveraging data from GST returns, bank statements, and credit bureaus. To further enhance services, YES BANK is actively embracing emerging technologies, particularly Artificial Intelligence (AI) and Generative Artificial Intelligence (GenAI), to optimise processes. AI implementation spans areas such as risk management, automation of repetitive tasks, predictive analytics, and personalised marketing strategies.

Currently, YES BANK's exploration of GenAI is in its early stages, focusing on evaluating chatbots and virtual assistants to enhance customer service while prioritising data security. The bank is cautious about GenAI adoption, given the sensitive nature of banking data, and is closely monitoring the development of relevant laws and policies. This careful approach ensures that any technological integration is secure and compliant with regulatory standards.

Focusing on financial products and services, YES BANK goes beyond traditional offerings. Besides secured and CGTMSE Guarantee backed lending, the Bank also offers unsecured lending options such as overdrafts and term loans for businesses without collateral. Specialised loans for rooftop solar energy installations help MSMEs reduce operational costs and promote sustainable practices. Important initiatives such as the implementation of Business Rule Engine (BRE) driven lending using financial and non-financial data, the launch of SME Direct Desk that caters to 50+ services for SME customers, and Digi OD for retailers and merchants have bolstered the overall value proposition.

Furthermore, the YES MSME Online portal provides MSME clients with a single intuitive interface, empowering MSME owners with access to all their accounts in one go. YES BANK’s USP platform YES Connect aims to provide a digital marketplace experience to its MSME clients, offering all ‘banking and beyond banking’ solutions under one roof. Platforms like YES SmartPay offer unified collection and reconciliation solutions, while its state-of-the-art Supply Chain Financing platform SMARTFIN enables the Bank to offer a completely digital onboarding and loan management process. The Bank leverages its market-leading API banking services to enable seamless technology integration with MSME accounting platforms, thereby providing real-time payment, collection, and reconciliation solutions.

Beyond business needs, YES BANK is focused on serving the MSME ecosystem through its family banking proposition, loyalty rewards, and dedicated relationship managers. This technology and digital-first approach to solving the MSME sector’s pressing credit challenges bodes well for the Indian MSME growth story and strengthens the country’s economic prospects in the long term.

MSMEs are the lifeblood of India's economy, and YES BANK’s comprehensive approach ensures these enterprises receive the support they need to thrive. By leveraging government schemes, offering tailored financial products, and embracing digital transformation, YES BANK is committed to nurturing the growth and development of MSMEs.

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