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SIDBI to disburse Rs 1,000 cr to MFIs

Press Trust of India  |  New Delhi 

Small Industries Development Bank of India (SIDBI) plans to disburse around Rs 1,000 crore in credit to (MFIs) during FY12, which is 19% more than the loaned amount last fiscal.

"We are not shying away from lending to in the recent time. Rather, we do have a target of disbursing around Rs 1,000 crore of loan in the current fiscal against Rs 840 crore of advances last fiscal," Deputy Managing Director NK Maini told reporters on the sidelines of a seminar on ‘Microenterprise Financing’ here.

The small scale development bank, he said, would continue to lend to institutions with good track record of transparency in lending and recovery practices.

The fund flow to the from financial institutions, especially from commercial banks, has dried up in the aftermath of ordinance passed by Andhra Pradesh government, restricting some of the lending practices followed by

Later, the Malegam Committee set up by the Reserve Bank of India has come up with a report for regulating the micro sector.

"We feel that Indian is very responsible and continues to be economically viable," Maini said.

SIDBI, which lends money to the MSME sector, is also trying to rope in foreign private equity (PE) investors to invest in Indian MFI sector, he added.

"We have recently met PE players in London and are continuously trying to rope in PE players into country’s MFI space," he added.

While referring to the overall disbursement target for this year, Maini said that the apex development bank would likely to post 18-20% growth in advances this fiscal.

has disbursed around Rs 46,331 crore to MSME sector in Fiscal Year 2011, which is up by 22% over the same period last year. SIDBI’s refinance to banks grew by 35% to Rs 22,900 crore last fiscal.

The bank is also in the process of closing its proposed venture capital fund for lending to small and medium enterprises soon.

"Out of the total Rs 1,000 crore VC fund proposed initially, we will close around Rs 400-500 crore of fund in the first phase. We have already received commitments from some public sector banks in this regard. As far as rest of the corpus is concerned, we will close it as and when demand for fund arises from enterprises," he said.

First Published: Fri, August 05 2011. 19:34 IST