SIDBI to provide adequate equity support to MFIs

Small Industries Development Bank of India (SIDBI) would provide adequate equity support to micro- finance institutions (MFIs) in a big way to enable them maintain capital adequacy ratio.

SIDBI chairman and managing director R N Malla today said, "We will provide equity to big MFIs which have registered themselves as NBFCs (non-banking financial companies)."

He said that this would help them maintain the desired capital adequacy ratio of 15 per cent during 2010-11.

Malla told reporters here that SIDBI had committed a Rs 500-crore support to MFIs across the country, out of which Rs 100 crore would be in the form of equity and the rest through sub-ordinated bonds.

He said that another fresh commitment of Rs 500 crore was likely to be made this financial year.

Malla said that during the current financial year, Rs 10,000-15,000 crore would be raised from the market by floating bonds.

He said that SIDBI was also talking to multilateral funding institutions like World Bank and others for a $300 million credit.