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UP to tie-up with Bank of Baroda for MSME funding, plans venture fund

Yogi govt may soon sign MoU with the PSU bank, Sidbi and some NBFCs to facilitate easy funding for small- and medium-sized units

Virendra Singh Rawat  |  Lucknow 

Bank of Baroda

The Uttar Pradesh government is in advanced talks with public sector lender (BoB) to ease credit flow to the micro, small and medium enterprises (MSME) sector.

The state has also proposed floating venture capital fund(s) in a tie-up with BoB and other public sector entities, including Small Industries Development Bank of India (Sidbi), apart from non-banking financial institutions (NBFCs).

According to UP and export promotion principal secretary Navneet Sehgal, the state would soon sign a memorandum of understanding (MoU) with BoB and some NBFCs to facilitate easy funding for the sector.

“We have asked the BoB to provide a tailor-made financing model, especially under our flagship one district, one product (ODOP) scheme, that seeks to promote UP’s traditional and indigenous industries,” he told Business Standard.

Chairing an ODOP review meeting, Sehgal conceded the government was aware of the irritants faced by the sector in securing working capital loans, and steps were being taken to ease financing support to the sector.

Launched in January 2018, ODOP is aimed at scaling up traditional industries associated with each of the 75 districts in UP. The Yogi Adityanath government had already tied up with ecommerce major Amazon to market the state’s indigenous products, such as ‘UP Khadi’ over its online platform.

He informed the state was also holding talks with to facilitate collateral free loans to startups, especially under ODOP programme.

Meanwhile, Amazon India director (seller experience) Pranav Bhasin here today said the company was committed to providing a platform to the country’s indigenous crafts, numbering around 650, by onboarding sellers, artisans and weavers. “So far, we have helped 50,000 Indian sellers clock sector sales worth $ 1 billion in the export market.”

He said Amazon was working closely with the UP government in onboarding sellers and MSME entrepreneurs on its platform, apart from providing logistics, training and structural support to expand their capacity.

The state government has also proposed to provide subsidies on capital expenditure (capex) and interest payment to borrowers under ODOP scheme. The government expects the ODOP programme to boost UP MSME exports to almost Rs two trillion from the current level of more than Rs 1.2 trillion across different categories and products.

UP is uniquely famous for product specific traditional industrial hubs across 75 districts viz. Varanasi (Banarasi silk sari), Bhadohi (carpet), Lucknow (chikan), Kanpur (leather goods), Agra (leather footwear), Aligarh (lock), Moradabad (brassware), Meerut (sports goods), Saharanpur (wooden products) etc. The website also showcases such authentic merchandises.

At UP Investors Summit 2018, the MSME sector netted 348 memorandum of understanding (MoUs) and investment proposals worth Rs 6,000 crore, although aggregate commitments to the sector was higher, considering number of MSME sector proposals were also clubbed under different heads, such as food processing, services etc.

First Published: Fri, September 20 2019. 17:55 IST