Sidbi to raise Rs 10k-cr Stand Up India Fund corpus from RBI

The Small Industries Development Bank of India (Sidbi) will be raising the proposed Rs 10,000-crore corpus for 'Stand Up India Fund' from RBI, which will be disbursed to Dalit and women entrepreneurs, a top official said.
"We are working to have the corpus in place for the Stand Up India Fund corpus. It will be raised from the Reserve Bank through the priority sector lending shortfalls," Sidbi Chairman and Managing Director Kshatrapati Shivaji told PTI here.
He said the corpus will be used to refinance loans extended by the banks to the Scheduled Castes, Scheduled Tribes and women entrepreneurs as part of the 'Stand Up India' scheme announced by the government earlier this year.

Shivaji said the groundwork on implementation of the scheme has already started.
Under the scheme announced by Prime Minister Narendra Modi earlier this year, each bank branch has been mandated to lend to one micro-enterprise promoted by a woman and SC/ST entrepreneur.
Shivaji said plans are also afoot to have a credit guarantee fund for such loans, wherein the entrepreneurs can pay a premium which will help her/him get a cover in case of a loan default.

Sidbi is currently working on four new credit guarantee funds, apart from the already operational Credit Guarantee Fund Trust for Micro and Small Enterprises which gives a cover of up to Rs 1 crore for MSME loans, he said.

The funds include one devoted for factoring, educational loans, Mudra loans of up to Rs 10 lakh and also the Stand Up India loans, he elaborated.
Shivaji further said the development finance institution is likely to close FY16 with a refinance of Rs 43,000 crore of loans extended to small businesses, which is up to Rs 7,000 crore more from last year.
Sidbi depends on a variety of instruments to raise resources, including certificate of deposits, commercial papers, non-convertible debentures and credit lines from external agencies.
He, however, said the landed cost of the money from external credit lines is very high due to the hedging costs and therefore Sidbi has been focusing on domestic borrowings to meet its funding needs.

"Most of our financing is in rupee terms for domestic borrowers. So, it does not make commercial sense to borrow in forex at a higher price," he said, adding Sidbi is constantly on the lookout for instruments to lower fund raising costs.
Apart from these, Sidbi has set up a Rs 1,000 crore 'Make in India Fund' to refinance bank loans to the manufacturing sector, Shivaji said, adding up to Rs 400 crore worth loans have already been sanctioned under the fund.
It has also committed Rs 300 crore of the Rs 10,000 crore 'Smile Fund' for small businesses announced earlier this year as part of the Start-Up India initiative, he said.