Beyond Capital, Capability Building is Critical for MSMEs to Thrive: DBS Bank India’s Sudarshan Chari
Beyond access to finance, MSMEs today need support in areas such as improving operational efficiency, tapping into new markets, and future-proofing their models, says Sudarshan Chari, MD and Head of SME Banking, DBS Bank India. DBS Bank India, which offers a range of banking services for micro, small, and medium-sized enterprises (MSMEs) and individual consumers, sees immense potential in this segment. The local arm of Singaporean lender, DBS Bank, views MSMEs as critical enablers of the Indian economy and supports their growth through various insight-driven initiatives. In a freewheeling chat with ET Digital, Sudarshan Chari, Managing Director and Head of SME Banking, DBS Bank India, discusses some key enablers that can empower this segment to fully leverage the opportunities that lie ahead. Edited excerpts:
The Economic Times (ET): What is the current composition of SMEs in DBS Bank India’s overall loan portfolio, and what is your plan for increasing it? Why is this segment important to you?
Sudarshan Chari (SC): Our SME business has grown at a high double-digit rate over the year as we aim to continue serving enterprises across key MSME hubs and remain a long-term partner for this segment. DBS combines superior digital offerings, Asian connectivity, tailored products and solutions, and a strong network to serve enterprises.
ET: What are some of the most pressing financial challenges faced by MSMEs in today’s time? How can banks make their journey more seamless?
SC: Capital is critical, but for small businesses to truly thrive, capability-building is just as important. Beyond access to finance, MSMEs today need support in areas such as improving operational efficiency, tapping into new markets, and future-proofing their models. This includes adopting cloud-based accounting tools, upgrading supply chain systems, building digital invoicing and payment capabilities, and gaining better access to compliance frameworks. DBS Bank India empowers entrepreneurs across the value chain by offering access to knowledge, tools, and networks. It aims to be a trusted, long-term partner to this segment. Through ecosystem partnerships, we help small businesses unlock both scale and sustainability.
DBS’ Asian connectivity is a significant advantage for Indian SMEs looking to expand beyond domestic markets. This means they can leverage the bank’s expertise in trade finance and foreign exchange to navigate international ecosystems more confidently. SMEs can benefit from its network and sectoral insights that help identify growth opportunities. The bank also empowers entrepreneurs through DBS BusinessClass, a community that connects SMEs to a dynamic network of business leaders, venture capitalists (VCs), specialists, and industry peers. Through this platform, SMEs receive the latest market insights, attend exclusive networking events, and gain access to programmes focused on digital transformation, sustainability, and market expansion—all designed to strengthen business capabilities and accelerate growth.
ET: What are some of the challenges that businesses face when adopting sustainable practices, and how does DBS Bank help in making this transition easier?
SC: As corporates and investors place greater emphasis on sustainability, enterprises across sectors are increasingly evaluating their supply chains to work with partners who demonstrate strong ESG credentials. In response, many SMEs are proactively stepping up their efforts to align with this shift towards responsible business. DBS remains committed to supporting these businesses on their journey to becoming future-ready by enhancing their capabilities and capacity in sustainability. This support extends beyond financing, including knowledge sharing, identifying tailored solutions to their unique challenges, and connecting them with a network of partners who can facilitate their transition. By enabling SMEs to navigate their sustainability journeys with guidance and access to relevant resources, the bank is helping build resilient, responsible enterprises that can navigate this evolving landscape.
ET: How is DBS shaping its MSME lending strategy to support enterprises, particularly those led by women, rural enterprises, or those driving community development?
SC: DBS Bank India views MSMEs as critical enablers of the economy and supports their growth through insight-led and need-based interventions. This begins with developing a strong understanding of their realities and the challenges they face. As part of these efforts, the bank commissioned the ‘Women and Finance’ study to better understand the needs of women entrepreneurs. The report captured insights from 400 self-employed women across 10 major Indian cities. The study revealed that among those who opted for credit, bank loans were the preferred option for 21%, while a notable 25% used personal gold as collateral—unlocking its value to access formal credit. Beyond access to capital, many women entrepreneurs called for mentorship (26%), support with government schemes (18%), and digital enablement (15%). These insights now inform how the bank designs tailored propositions for women-led businesses, working closely with its ecosystem partners. Additionally, through the DBS Foundation’s flagship grant programme, innovative social enterprises and SMEs across Asia are awarded funding of up to Rs 1.6 crore (SGD 250,000). These grants help businesses scale their impact through product innovation, market expansion, R&D, and infrastructure development.
ET: What are some of the biggest financing barriers for first-time or non-traditional MSME entrepreneurs, especially in tier II and tier III cities or informal sectors, and how is DBS working to close this gap?
SC: First-time MSME entrepreneurs in tier II and tier III cities often lack traditional credit history or consistent documentation. In such cases, alternative data-based credit frameworks can help build a more accurate assessment of business performance, supporting prudent lending decisions. In addition to finance, DBS Bank India collaborates with ecosystem partners to assist these entrepreneurs. Through DBS BusinessClass foundED, the bank connects entrepreneurs with advisors and peers through a series of pan-India events. These events include acceleration programmes that focus on digitisation, working capital, and social impact, helping these enterprises in becoming more resilient, formalized, and prepared for the future.
ET: How does DBS Bank use digital tools and alternative data to assess creditworthiness for small businesses lacking traditional collateral or credit history?
SC: For many small and early-stage businesses, limited credit history or lack of traditional collateral can be a barrier to accessing finance. To address this, lenders are increasingly turning to data-driven credit assessment frameworks that rely on alternative data. These may include GST filings, cash flow patterns, verified business transactions, and timely utility payments, which together offer a more comprehensive and dynamic view of a business’s financial health. This helps improve the ability to assess emerging or informal enterprises and also supports faster, more informed, and inclusive decision-making, especially for first-time borrowers.
ET: What new opportunities does digitalisation create for MSMEs with your support?
SC: DBS Bank India believes digitalisation is a powerful enabler for MSMEs—not just in how they bank, but in how they run and grow their businesses. It opens up new avenues to improve efficiency, access new markets, and make smarter, faster decisions. The bank’s goal is to help businesses embed digital capabilities into their everyday operations so they are better equipped to scale sustainably. Through its mobile-enabled platform, DBS IDEAL, MSMEs gain real-time visibility and control over payments and collections, helping them manage cash flows more confidently. DBS’s APIs integrate seamlessly with ERP systems like Tally, streamlining accounting and reconciliation. The bank has simplified processes through online account opening, e-documentation, and quick loan approvals, reducing friction and allowing entrepreneurs to focus on what matters most: growing their business. Further, it supports businesses in leveraging digital opportunities, especially as Indian MSMEs increasingly tap into e-commerce and the ONDC network.
ET: What kind of mentorship is necessary for MSMEs today to get a better understanding of financial and non-financial tools to support their businesses?
SC: For MSMEs to effectively leverage financial and non-financial tools, they require holistic support. Access to knowledge remains a challenge. Many MSMEs need guidance on managing cash flows, understanding cost structures, exploring financing options, and adopting digital tools such as ERP systems. They seek access to subject matter experts in areas such as compliance, supply chain management, strategic planning, business continuity, and preparing for SME IPOs. Banks can play a pivotal role in bridging this knowledge gap. For instance, DBS Bank India regularly organises knowledge seminars with ecosystem partners around these themes. As these businesses increasingly look to expand beyond domestic markets, mentorship becomes even more critical. This can help MSMEs become more resilient, agile, and growth-ready. Cross-border growth requires strong market understanding, infrastructure, and trusted financial partners. With its pan-Asia presence, DBS supports Indian MSMEs with sector expertise, financing solutions, and connections that enable access to global value chains.
ET: Going ahead, what are some of the new initiatives in the pipeline that DBS Bank is planning for its SME borrowers?
SC: DBS Bank India explores and implements new initiatives to better support its SME borrowers, aligning with evolving market needs and priorities. Most recently, on MSME Day, the bank announced a waiver of prepayment and foreclosure charges for all MSMEs registered under UDYAM, for both existing and new borrowers. This move enhances financial flexibility for these businesses. DBS Bank India continues to broaden its product offerings for MSMEs, including the rollout of CGTMSE-backed working capital, trade finance, small-ticket LAP, and receivable financing propositions. The bank is also focused on working closely with SME borrowers to develop sector-specific propositions that create greater value. The bank invests significantly to enhance its digital capabilities and has rolled out a paperless post-approval journey for SME borrowers to ensure faster turnaround times and greater convenience. Euromoney acknowledged these efforts and recently awarded DBS Bank India the title of ‘Best Digital Bank’ for SMEs in the country.
As featured in ET Rise
World’s Best Bank 2025, 2021, 2019, Euromoney
World’s Best Bank for Customer Experience 2025, Euromoney
World’s Best Bank for Corporate Responsibility 2025, 2023, Euromoney
Asia’s Safest Bank, 2009 – 2024, Global Finance
Best Bank in the World 2022, Global Finance
India’s Best International Bank 2021, Asiamoney
World’s Best Banks - #1 in India 2021, Forbes
World’s Safest Commercial Bank 2021, Global Finance
