SIDBI ties with Cashpor Micro Credit to give affordable loans to underserved

SIDBI today said it has tied-up with Cashpor Micro Credit to provide loans to underserved at affordable rate of interest.

Cashpor provides micro-finance exclusively to below poverty line women in eastern UP and Bihar.

SIDBI said in a statement that has initiated a pilot programme in partnership with Cashpor Micro Credit to evolve and develop a market to extend credit to micro borrowers at 16.95 per cent per annum as against the lending by MFIs in the range of 20-24 per cent a year.

The lender said it is the first time it is exploring this market by extending direct credit to "missing middle segment" which is likely to create a huge demonstration effect for reducing the cost of lending to the micro enterprises working in this area.

The plan is initially being launched in two relatively less developed districts of Uttar Pradesh -- Varanasi and Ghazipur.

It would soon be extended to Mirzapur, Jaunpur, Chandauli and other relatively less developed districts in Uttar Pradesh, SIDBI said.

More partners and geographies would be added in due course after testing the model in the pilot phase, it said.