How has Nabil Bank prioritised the SME sector? What is the share of Nabil’s SME lending in the bank’s overall lending portfolio?
Nabil Bank has shifted its focus from corporate to SME banking exponentially ivncreasing lending in the SME and retail portfolio. We have set impressive targets to increase our lending books to support SMEs in the current fiscal year. With our aggressive strategy in building SME and retail portfolio via various interventions in the market, we have been able to increase our granular exposure’s share to approximately 50 percent in overall lending portfolio of the bank. Nabil has disbursed more than Rs 10 billion loans under retail and SME portfolio in this fiscal year alone. We are also focusing on the process simplification for SME segment to reduce the turnaround time for service delivery with implementation of latest tools and software.
Nabil has collaborated with One to Watch (OTW) to support the pandemic-stricken MSMEs. What does this partnership envisions?
The aim of this collaboration is to support MSMEs with collateral-free and interest-free loan to meet their short-term working capital needs. Apart from the loan, they shall also get the technical assistance in the form of customized business advisory/development services to enable them to preserve business continuity and build resilience. We aim to help in job retention in MSMEs and also to contribute to the overall recovery of the economy with immediate revival funds free of cost for maximum period of 18 months. Numerous MSMEs have applied for the fund and some are already forwarded by OTW and are under scrutiny/approval process of the bank.
How is Nabil’s collaboration with e-commerce company Daraz moving forward in supporting the pandemic-affected SMEs?
The ‘Sarathi Program’ aims to support SMEs that are selling their products and services through the online platform of Daraz. One of our top priorities is to support such SMEs to enhance their business through value chain financing. With the low cost funds made available to the vendors of Daraz, it shall help them to boost their business and enhance the digital economy which is the ultimate requirement of the country. This partnership is also a unique model of financing in Nepal where we have considered various scoring model of loan approval process which Daraz has claimed that was not done in various other countries in Asia where they are present. Here also, numerous applications have been received through Daraz platform and we already have more than 100 SMEs going through processing for their loan requirement at present at various stages. This is a start and we plan to expand our collaboration in various other aspects as well.
Besides financing, is Nabil Bank also providing technical assistance in the form of customized business advisory/development services to SMEs?
Nabil Bank is developing its internal resources and capacity to provide complete advisory services to the SMEs. However, the bank has already tied-up with few intermediaries that are providing the advisory services/technical assistance to the SMEs in various aspects. In general terms, balance sheet management and experience sharing have been done by the bank directly to some extent whereas we are planning to expand our banking services through a separate vertical as Sustainable Banking which will be fully engaged for the technical assistance and advisory, development services to achieve a longer term strategy. Moreover, tie-ups with experts and established entities will continue on merit basis.
What banking products and services Nabil Bank has introduced to help SMEs in terms of access to finance?
We aim in redesigning the definitional approach to the SME segment and develop international standard SME focused strategies in the local context. Nabil Bank is working on enhancement of SME segments; an outcome of which is products like Nabil Sajilo Karja, Nabil Nari Karja and Nabil Sajilo Express Karja. In designing these products, we have taken into account the need to streamline and simplify our internal processes along with offering sensible pricing to SME segment. We also signed an agreement with UKaid Sakchyam- Access to Finance for “Designing and Implementing a SME focused strategy to enhance banking services for SME segment in Nepal” and have been working on enhancement of SME segments with combined effort.
Our collaborations with OTW and Daraz are first of their kinds in Nepal. Besides, we have been conducting the reengineering of our entire business modality to position Nabil as the best SME bank in the country. We are working on various other simplified products on easy business loan and value chain financing which will be launched very soon to revamp the existing financing modality in the SME segment.