SIDBI to Handhold Newly Formed Capital Small Finance Bank

By 121 News

Chandigarh 25^th February:-  Small Industries Development Bank of India (SIDBI) today signed a Memorandum of Understanding  Capital Small Finance Bank (CSFB) whereby it will handhold the newly formed Small Finance Bank  to enable it  provide  concessional finance to Micro, Small and Medium Enterprises (MSME).

The MoU is aimed at promoting and strengthening the MSMEs especially in the Micro & Small Enterprise segment through a multipronged strategy comprising concessional funding at MCLR of CSFB (presently 9.6%) under Refinance from SIDBI, Joint financing / Co-financing, Cluster Development and Capacity Building of CSFB officials. It is also envisaged that joint financing / co-financing of MSME for capital expenditure under "SIDBI Make in India Soft Loan Fund for Micro, Small & Medium Enterprises", popularly known as SMILE, at a concessional rate of 9.60% by SIDBI along with Working  Capital finance from CSFB at competitive rate, would be pursued proactively. The resources and expertise of SIDBI in MSME financing and outreach of CSFB in MSME clusters of Punjab are proposed to be leveraged. This initiative of SIDBI and CSFB will go a long way in creating a conducive ecosystem for MSME desirous of accessing concessional / composite funding in the State of Punjab. Further, SIDBI and CSFB shall also explore ways and means to enhance reach and use of facilities provided under the Government of India's Stand up India scheme and the Stand up India / Udyami Mitra portals created by SIDBI for MSME sector.

Besides, the MoU also envisages that the Promotional and Developmental activities of SIDBI could be taken up jointly with CSFB for the benefit of MSME in areas of Skill development, technology and financial linkages, human resources development, adoption of best practices by MSME, including cluster based interventions in areas of technology, energy efficiency, energy saving, etc. and for promoting Digital Financial Inclusion initiatives. It may be pertinent to mention that SIDBI plays an important role in the promotional and developmental space for the benefit of the MSMEs.

Speaking on the occasion, S S Samra, Managing Director CSFB said that CSFB has taken several steps in the last year to proactively reach out to the micro and small enterprises and has accordingly been expanding it branch network continuously. The MoU with SIDBI shall give a further boost to the MSE segment by reducing cost of credit for the small borrowers.

Manoj Mittal, Deputy Managing Director, SIDBI, while speaking on the occasion outlined the various initiatives taken in the recent past by SIDBI for enhancing credit flow to MSE Sector viz., Stand Up India Portal for providing an online market place for accessing finance and handholding support to SC/ST and Women entrepreneurs for setting up Greenfield projects with loan requirement from Rs 10 lakh to Rs 100 lakh, provide quasi-equity /equity to startup ventures under Fund of Fund operations, setting up of National Credit Guarantee Trustee Company (NCGTC) for guaranteeing loans in sectors such as skill development, education, MUDRA, factoring, etc. thereby boosting institutional credit flow to these sectors. Manoj Mittal also mentioned that SIDBI considers Small Finance Banks as natural partners of SIDBI in improving access to credit by MSME and expressed confidence that the MoU will go a long way not only in providing the much needed fillip to the objective of "MSME Credit @ Corporate Rates", but also improvement in the MSME ecosystem. He further added that SIDBI, as a proactive step has taken initiatives to handhold the Small Finance Banks for the overall benefit of the ecosystem.