MICROCAPITAL BRIEF: India’s SIDBI Sets up $154m Fund to Support Micro-, Small and Medium-Sized Enterprises

The government-backed Small Industries Development Bank of India (SIDBI) recently announced that it has set up a fund with INR 10 billion (USD 154 million) to provide concessional financing to micro-, small and medium-sized enterprises (MSMEs) in the manufacturing sector. As per a statement released by SIDBI, the objective of the fund is to transform the Indian MSME sector into a “world class manufacturing hub” in line with the Indian government’s “make in India” program. SIDBI also reportedly has signed an agreement with the Word Bank Group to create a “Partial Risk Sharing Facility for Energy Efficiency (PRSF) Projects” to promote energy efficiency amongst MSMEs. The contract consists of a guarantee fund totaling USD 37 million and technical assistance totaling USD 6 million [1].

As of June 2015, SIDBI provided microcredit of approximately INR 94 billion (USD 1.4 billion) through microfinance institutions. As of March 2013, SIDBI reported total assets of INR 619 billion (USD 9.6 billion).

By Arpita Sarkar, Research Associate

About Small Industries Development Bank of India (SIDBI):

Established by the Indian Parliament in 1990, the Small Industries Development Bank of India (SIDBI) offers products and services in areas including direct finance, international finance, government subsidy and fixed deposits. Its clients include financial institutions, investors and entrepreneurs. SIDBI participates in the Indian microfinance sector by providing credit and capacity building grants to large- and medium-scale microfinance institutions. As of June 2015, SIDBI provided microcredit of approximately INR 94 billion (USD 1.4 billion) through microfinance institutions. As of March 2013, SIDBI reported total assets of INR 619 billion (USD 9.6 billion).

About The World Bank Group:

Headquartered in the US, the World Bank Group (WBG) is a multilateral development organization that aims to improve living standards for people in developing countries. As of 2014, WBG encompasses the International Bank for Reconstruction and Development (IBRD), owned by 188 member nations; the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). WBG has 10,000 employees and operations in approximately 120 countries as of 2014. WBG had commitments of USD 52.6 billion in loans, grants, equity investments and guarantees as of December 2013.

Sources and Additional Resources:

[1] Times of India: “SIDBI sets up Rs 1000 crore ‘Make in India’ fund for MSMEs,” http://timesofindia.indiatimes.com/business/india-business/SIDBI-sets-up-Rs-1000-crore-Make-in-India-fund-for-MSMEs/articleshow/47773925.cms

MicroCapital, July 16, 2013, “MICROCAPITAL BRIEF: Small Industries Development Bank of India (SIDBI) Launches India Microfinance Platform,” https://www.microcapital.org/microcapital-brief-small-industries-development-bank-of-india-sidbi-launches-india-microfinance-platform/

MicroCapital, December 22, 2012, “MICROCAPITAL BRIEF: Small Industries Development Bank of India (SIDBI) Among Banks Requiring Third-Party Assessment of Codes of Conduct from Microfinance Institutions (MFIs) Seeking Wholesale Loans,” https://www.microcapital.org/microcapital-brief-small-industries-development-bank-of-india-sidbi-among-banks-requiring-third-party-assessment-of-codes-of-conduct-from-microfinance-institutions-mfis-seeking-wholesale-loans/

MicroCapital, April 2, 2012, “MICROCAPITAL BRIEF: Small Industries Development Bank of India (SIDBI) to Commit $5.8m in Equity, Loans to Small Microfinance Institutions,” https://www.microcapital.org/microcapital-brief-small-industries-development-bank-of-india-sidbi-to-commit-5-8m-in-equity-loans-to-small-microfinance-institutions

MicroCapital Universe Profile: Small Industries Development Bank of India (SIDBI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Small+Industries+Development+Bank+of+India+%28SIDBI%29

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