IOB gets Rs 100 cr MSME funding from Sidbi

Indian Overseas Bank (IOB) on Friday received Rs 100 crore from Small Industries Development Bank of India (Sidbi), as part of refinancing agreement. Sidbi has lined up Rs 2,000 crore equity investment in the country's micro, small and medium enterprises (MSME).

Speaking to reporters after signing an MoU with IOB here on Friday, Sidbi chairman and managing S Muhnot said one of the greatest challenges for Sidbi was to reach out to the borrowers. To address this, it was planning to join hands with banks and had selected IOB as the first partner for the programme.

IOB recently received an award for its performance in MSME lending during 2010-11 from the President.

M Narendra, chairman and managing director, Indian Overseas Bank said the challenge for the bank was to retain this performance and this fund would help it achieve its disbursement target for the MSME sector. The bank has set a target to increase the disbursement by 15-20 per cent to this sector.

During the current fiscal, the bank disbursed Rs 1,983 crore to the sector, which is a growth of 17 per cent compared with last year. Total aggregate disbursements stood at around Rs 13,822 crore and number of accounts 44,871.

The bank is planning to open specialised branches to cater to this sector. “We have got 40 licences to open these branches,” said Narendra.

He said the money from Sidbi would be utilised to address MSMEs' long- term funding requirement including product development, capital, market expansion including for international entry, research and others.

IOB opens 75 branches
Indian Overseas Bank on Friday opened 75 branches and 50 ATMs, as part of its platinum jubilee function. With these, the number of branches has increased to 2,400, including 658 rural, 644 semiurban, 565 urban and 533 metropoliton. The bank plans to open 200 more branches before the end of the current fiscal. It has adopted 12 villages as part of IOB Sampoorna, said Narendra, taking the total villages to 91.