In a bid to serve the micro SME — lower end of SME segment— HSBC has launched unsecured line of credit (LoC) for the Indian small- and medium-sized enterprises (SMEs). The unsecured LoC, which is known as Business Credit, will be available up to Rs 35 lakh. No security will be required upto Rs 15 lakh and 25% security in the form of fixed deposits (FD) will be required for a loan falling in the range of Rs 15 lakh to Rs 35 lakh. Also the interest will be calculated on daily balances and charged on monthly basis only on the actual amount utilized. However, the average interest rate is expected to be around 16-19%. “Currently, HSBC has 25,000 SME customers and we expect a huge potential in the SME market” said Subir Mehra, head-commercial banking, HSBC India. The SME sector has witnessed a growth of 30-40% in the past.
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