India faces a significant socio-economic challenge: employment generation, particularly in rural areas and marginalised communities. One of the most effective solutions has been the credit-led growth of Micro, Small, and Medium Enterprises (MSMEs). Bank of India (BOI), a leading public sector bank, has played a key role in this effort, with substantial support from the Pradhan Mantri Mudra Yojana (PMMY), a flagship initiative by Prime Minister Narendra Modi. Together, BOI and PMMY have catalysed self-employment and entrepreneurship across India, fostering financial inclusion and driving economic growth.
Established in 1906, Bank of India has become a major financial supporter of MSMEs. With over 5,100 branches nationwide, the bank has seen its MSME portfolio grow to ₹68,039 crore in 2022. It is projected at ₹100,300 crore by 2025. This aligns with the government’s mission to drive employment and financial inclusion. BOI has financed over 12 lakh MSME units, generating nearly 60 lakh jobs. These enterprises contribute over 30% to India’s GDP and over 50% of the country’s exports, showcasing their critical role in economic development.
Launched in 2015, PMMY has been transformative in expanding credit access for micro-entrepreneurs. Through this scheme, Bank of India has sanctioned loans totalling over ₹9,100 crore by 2023, helping small businesses gain much-needed financial support. PMMY’s emphasis on reaching marginalised groups, including women, scheduled castes and tribes, has further contributed to socio-economic empowerment.
By providing affordable credit, PMMY has fostered a culture of entrepreneurship, particularly in rural areas. This has allowed individuals to start small businesses, promoting financial independence and reducing reliance on formal employment. As a result, MSMEs have emerged as significant contributors to job creation and poverty alleviation.
Recognising the diverse needs of MSMEs, Bank of India has developed several flagship products that cater to different business sectors. Products such as “Vehicle Express,” “BOI Star Asset-Backed Loan,” and “Doctor Plus” provide tailored financial solutions for both manufacturing and service-based MSMEs. This variety ensures that enterprises of all sizes can access the capital needed to grow their businesses.
To streamline access to credit, BOI has also improved its loan processing systems. The bank reduced Turn-Around-Time (TAT) and introduced digital lending platforms, making it easier for MSMEs to obtain financing quickly and efficiently. These efforts enhance both customer satisfaction and operational efficiency, positioning BOI as a reliable partner for small businesses.
The success of BOI’s credit-led growth strategy is evident in its contribution to employment generation. During the 2023-24 financial year alone, BOI added over 4.5 lakh new MSME accounts, injecting fresh vitality into local economies. These efforts have created opportunities for small businesses to thrive, particularly in rural areas where formal job opportunities are scarce.
Bank of India’s active support for government schemes like PMMY and Stand-Up India has been instrumental in promoting financial inclusion. By ensuring access to credit for first-time entrepreneurs and marginalised groups, BOI has contributed to building an inclusive financial ecosystem. This has empowered communities, especially in underserved regions to contribute to economic growth.
Looking ahead, Bank of India aims to continue its support for MSMEs, targeting a 19% growth in its MSME portfolio for the fiscal 2024-25. The bank’s introduction of sustainable finance products, such as the “Star Energy Saver” for solar energy projects, highlights its commitment to promoting both economic and environmental sustainability.
In conclusion, Bank of India’s support for MSMEs, coupled with government initiatives like PMMY, has been instrumental in addressing India’s employment challenge. Through credit-led growth, BOI has empowered millions of entrepreneurs, enabling them to create self-employment opportunities and contribute to the nation’s socio-economic development.
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