A whole digi push for small businesses from HDFC Bank

The biggest private sector bank in the country, HDFC Bank, is going digital to extend loans to small businesses and has announced the launch of the “SmartHub Vyapar program” to cater to this segment.

The financial institution at present has around 2.7 million retailers and onboards around one lakh new businesses on board every month, clocking nearly INR 1,000 crore in new loans. Over the next three years, the bank plans to scale it up to over 20 million retailers. Over half of all the new retailers function through the app, the bank stated.

The app is going through its pilot phase and will be launched soon. The new app will include all payment options, including cards, QR codes, UPI, tap and pay, and SMS-based payments. In an interview with The Economic Times, Parag Rao, country head-payments, HDFC Bank, said, “We don't want to wait for the perfect product to launch, we will put together a minimum viable product and upgrade the offerings.”

He also stated that the app will provide the merchants with loans as it will have fund flow-based underwriting. There will be multiple options such as short-term loans, working capital, business card, etc.

The bank’s other app ‘AutoFirst’ is specifically aimed at extending automated auto loans. The forward and backward integration has been done and the app gives an array of choices to customers seeking auto loans, Rao told ET. HDFC Bank has also set up a digital customer hub, aiming to let customers experience banking products across channels. It will provide customized responses to buyer queries and complaints.

The Reserve Bank of India, December 2020 had ordered the bank to stop issuing new credit cards till it sorted out its technological problems. In August 2021, the regulator lifted the restrictions partially and allowed the bank to issue credit cards. With the curbs lifted completely recently on all its digital operations, the bank is going ahead full steam. It is pushing its mobile and other apps, like Payzapp and Smartbuy platforms, and is also planning to launch a digital credit card.