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| SIDBI to provide Rs300cr to MFIs |
| Bishnu Dash / Kolkata/ Bhubaneswar Sep 18, 2008, 03:50 IST |
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In a major push to the micro-finance movement in Orissa, the Small Industries Development Bank of India (SIDBI), providing capacity-building assistance to micro and small industrial units, targets to lend Rs 300 crore to the Micro Finance Institutions (MFIs) in the state during the current fiscal.
While it has lent Rs 150 crore to MFIs benefiting 20 lakh beneficiaries so far, it aims to lend additional Rs 300 crore during the current fiscal benefiting 40 lakh more micro-enterprises. This will take the cumulative lending of the bank to this sector to Rs 450 crore by the end of 2008-09.
“Micro-finance is a major thrust area for SIDBI in Orissa and we plan to increase lending to this sector significantly. Our lending is targeted to reach Rs 450 crore by the end of this fiscal from about Rs 150 crore now”, R M Malla, chairman and managing director (CMD), SIDBI, told Business Standard.
Stating that SIDBI is emphasising on the development of micro-enterprises in a major way, he said, SIDBI Foundation identifies, nurtures and develops select potential MFIs as long term partners and provides credit support for their micro credit initiatives.
With a view to create micro-enterprises, the bank is nurturing more than 40 new MFIs in the state. MFIs, having considerable experience in managing micro credit programmes, high growth potential, good track record, professional expertise and committed to viability, are provided financial assistance for on-lending by the bank.
SIDBI is providing grants for capacity building of the MFIs and once the MFIs attain the required capacity they are provided with the first dose of loan ranging from Rs 50 lakh to Rs 1 crore. During the next stage, loan assistance of about Rs 4 crore to Rs 5 crore is given and in the subsequent stage loans ranging between Rs 20 crore and Rs 50 crore are provided to the MFIs.
He said, the bank is also trying to fill the gap in the loan requirements of the micro, small and medium enterprises (MSME) sector, particularly for the first timers. Keeping their difficulty in view the Government of India (GoI) and SIDBI have set up Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
An entrepreneur in the micro and small enterprise (MSE) sector can avail credit facilities upto Rs.50 lakh without collateral security with a little charge. In case of non repayment of the loan by these entrepreneurs, SIDBI is extending the guarantee of reimbursing 75 percent of the outstanding (80 percent in case of women entrepreneurs).
He said, about 7000 units are covered under the CGTMSE in Orissa. While the bank provided risk coverage to about 97,000 such units across the country under the scheme by March 2009, the figure is likely to reach 1.5 lakh by the end of the current fiscal. Besides, SIDBI is looking at the clusters for development in these areas.
Similarly, to facilitate the availing of credit by the MSMEs, SIDBI along with other banks and consultants have launched SME Rating Agency of India Limited (SMERA). Focusing primarily on the SME segment, it is providing ratings on a comprehensive, transparent and reliable manner which will facilitate larger and easier flow of credit from the banking sector to SMEs.
“With the Basel-II norms on capital adequacy coming in, the advantage of rating is that if a unit is rated externally, it will encourage the banks to lend”, Malla said adding that the enterprise with rating is able to source the loan at 0.5 to 1 percent lower interest.
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